Hungary to issue green sovereign bond in China next week – debt agency chief

BUDAPEST, Dec. 8 (Reuters) – Hungary has mandated the Bank of China to organize a yuan-denominated green Panda sovereign bond issue that is expected to be finalized next week, the managing agency’s chief executive said on Tuesday evening. of the Hungarian AKK public debt.

“This will be the first green sovereign bond issue approved by Chinese authorities. We have normally issued 1 billion to 2 billion yuan bond issues in China in previous years, this issue will likely be closer to 1 billion yuan ($ 157.40 million) but will see us, “Zoltan Kurali said in an interview with Reuters.

Kurali said the purpose of the transaction is to ensure Hungary’s continued presence in the Chinese market.

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In September, Hungary sold $ 2.25 billion in 10-year bonds and $ 2 billion in 30-year bonds, and also issued € 1 billion in seven-year Eurobonds while that the central European country was reviewing its 2021 financing plan.

Yields on forint-denominated government bonds have surged in recent weeks amid global uncertainty over the economic impact of the new wave of the coronavirus pandemic, and with the Hungarian central bank proceeding to a series of interest rate hikes to curb the spike in inflation.

Hungary sold 5-year benchmark bonds at an average yield of 4.28% in a December 2 auction and 10-year bonds at 4.60%. . On Tuesday, the yield of these two securities stood at 4.09% and 4.36% according to the AKK fixing.

“Now we see that an equilibrium level of returns has been reached where we are seeing inflows,” Kurali said.

“Based on the data and auction results of the past two and a half to two weeks, we can see that, yes, there is still volatility, but there are entries in forint-denominated bonds.”

Asked about the Hungarian central bank’s plan to phase out its bond buying program, Kurali said he did not expect this to have a significant impact on the local bond market. The bank has halted its bond purchases in recent weeks. Read more

The National Bank of Hungary (NBH) was the first central bank in the European Union to start raising interest rates in June to fight inflation. ($ 1 = 6.3533 yuan Chinese renminbi)

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Reporting by Krisztina Than; Editing by Kim Coghill and Alex Richardson

Our Standards: Thomson Reuters Trust Principles.

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