(Bloomberg) — Hungary is sticking with its practice of securing international financing early in the year, undeterred by the forint’s slide toward two-year lows.
The government is offering a benchmark euro-denominated note due in 2034, with initial price talk in the area of 240 basis points above midswaps. It’s also selling a green note due 2040, with pricing around midswaps plus 270 basis points, according to a person familiar with the matter who asked not to be identified. The issues could price later on Tuesday.
Tuesday’s bond sale is the first salvo this year from Hungary’s debt agency which plans to issue much as €2.5 billion ($2.6 billion) in international securities in the first half of 2025. The agency appears keen to front-load debt sales early in January, just as it did in 2024 when it joined what eventually became a record-setting period for emerging debt issuance.
The foreign financing could be key for Hungary at a time when about €19 billion in European Union funds earmarked for the country, have been frozen due to concerns over graft and the rule of law, and after €1 billion in EU aid was permanently lost last year.
The potential deals also coincide with the forint’s deepening weakness. The currency has slipped to a fresh two-year low against the euro, undermined by an economic recession and concerns of fiscal spending before next year’s election.
The bookrunners of the bond sale are Citigroup Inc., Deutsche Bank AG, Erste Group Bank AG, ING Bank NV and Raiffeisen Bank International AG.
–With assistance from Marton Kasnyik, Colin Keatinge and Zoltan Simon.
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