Hungary raises more than $ 4 billion in sale of double-tranche bonds

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BUDAPEST – Hungary has raised more than $ 4 billion (€ 3.4 billion) in a double-tranche bond deal, selling 10 and 30-year securities in a four-fold deal oversubscribed, Finance Minister Mihaly Varga said in a video on Facebook. Wednesday.

Varga said Hungary will sell more euro-denominated bonds on Wednesday, details of which will be announced later today.

The Refinitiv IFR news service announced on Monday that Hungary will launch a multi-tranche deal comprising both euro and dollar denominated bonds, marking Hungary’s first dip in the dollar since a $ 3 billion bond issue. early 2014.

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The Hungarian debt agency (AKK) on Monday revised its financing plan for 2021, saying it would raise the equivalent of 4.5 billion euros ($ 5.3 billion), far more than expected for help cover a likely delay in money from the European Union’s COVID stimulus fund.

The AKK said Hungary sold $ 2.25 billion in 10-year bonds with a 2.125% coupon and $ 2 billion in 30-year bonds with a 3.125% coupon, at 100 basis points and 150 basis points to the corresponding US Treasury bills.

Hungary and Poland are both at loggerheads with the bloc’s executive on issues ranging from LGBT rights to press freedoms. In July, the Commission launched legal action against the two men for discriminatory measures against the gay community.

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Last November, Varga said Hungary would no longer issue foreign currency bonds until at least the start of 2023, with Prime Minister Viktor Orban’s government pursuing a strategy to reduce its dependence on foreign investors. .

“Hungary’s unexpected rush to Eurobond markets shows the limits of its HUF-ization strategy, especially when disbursements of EU funds are threatened,” said Raiffeisen economist Stephan Imre , in a note.

“Despite the likely win-win situation for the issuer due to cheap financing conditions and the ever-existing rise in yields for (euro-based) investors, there remains a bitter taste in that the administration Hungarian seems to be preparing for a protracted conflict with the EU.

(1 euro = $ 1.1815) (Reporting by Gergely Szakacs; Editing by Kevin Liffey and Edmund Blair)