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Hungary issues USD 4.25 billion of FX bonds

Hungary has issued forex bonds worth a total 4.25 billion dollars, the finance minister said on Facebook on Thursday. Offers for the bonds came to over 12 billion dollars, "showing investor confidence in the Hungarian economy remains strong", Mihaly Varga said.

The minister noted that Hungary’s year-end public debt ratio had fallen to 73.5 percent of GDP at the end of last year from 76.8 percent at end-2021, while the budget deficit had reached 4.9 percent of GDP, rather than an earlier expected 5.9 percent.

Varga also said the ratio of forex debt within Hungary’s public debt would remain under the 30 percent threshold.

“We count on a further reduction in the public debt and a lower deficit this year, too,” the minister said.

In a press release, the State Debt Management Centre (AKK) said it had issued 1.5 billion dollars of five-year bonds, 1.5 billion dollars of ten-year bonds and 1.25 billion dollars of 30-year bonds on Wednesday.

The yield on the five-year bond is 6.27 percent, 240 basis points over the benchmark US Treasury yield, while the yield on the ten-year bond is 6.51 percent, 280 basis points over the benchmark US Treasury yield. The yield on the 30-year bond is 7.10 percent, 325 basis points over the benchmark US Treasury yield, AKK said.

Part of the proceeds will be used to buy back USD bonds maturing in 2023 and 2024, and the rest will go toward “general financing purposes”, the centre said.

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