Hungary offers to buy back dollar FX bonds, to issue new benchmarks

BUDAPEST, Jan 4 (Reuters) – Hungary offered on Wednesday to buy back U.S.dollar-denominated foreign currency bonds maturing in 2023 and 2024, and mandated new issues of 5-year, 10-year and 30-year dollar benchmark bonds.

The new bonds will be priced later on Wednesday, IFR said.

“Hungary has mandated BNP Paribas, Citi, Deutsche Bank, Goldman Sachs Bank Europe SE and J.P. Morgan as bookrunners for a three-part USD benchmark with 5yr, 10yr and 30yr tranches,” it said, without giving an indication about the planned size.

Hungary’s state debt agency AKK was not immediately available for comment.

Hungary said in a filing with the London Stock Exchange earlier on Wednesday that it was offering to buy back dollar-denominated bonds worth a total of more than $2.7 billion.

The debt agency said last month it planned to issue forex bonds worth up to $4 billion in the first half of 2023 and a benchmark-sized eurobond later in 2023.The Hungarian government is trying to curb debt financing costs given surging inflation and high domestic interest rates.

AKK Chief Executive Zoltan Kurali said last month that AKK would raise the limit on the share of foreign currency debt within the total stock to 30% from the current 25%.

Kurali has said the agency would opt for a dollar bond issue as this was cheaper, while the AKK would also resume 3-year forint-denominated bond auctions this year.(Reporting by Krisztina Than and Gergely Szakacs Editing by Mark Potter)