Hungary issues EUR 1 billion in green bonds
Finance minister says oversubscription shows that investors are confident in the Hungarian economy even in the face of the sanctions crisis.
The proceeds from the EUR Green Bond will be used by the issuer to finance and refinance certain green expenditures of the central budget in line with the sovereign green bond framework.
Hungary issued EUR 1 billion in green bonds on Monday, with the 4.25-year series maturing on February 22, 2027, with a fixed interest rate of 5.319 percent and a maturity of 4.25 years.
According to a statement by the State Debt Management Centre Zrt. (ÁKK), the yield spread is 2.50 percent over the EUR mid-swap rate, which is 3.221 percent above the yield of the benchmark German government bond (OBL) maturing on 9 October 9, 2026.
ÁKK pointed out that despite the volatile market environment, investor interest in the bonds was strong at 4.5 times.
Finance minister Mihály Varga announced that the more than four-fold oversubscription shows that investors are confident in the Hungarian economy even in the face of the sanctions crisis, and that investor confidence in the Hungarian economy is unbroken. While in 2010 more than half of the debt was in foreign currency, the ratio has now improved to around 25 percent, with the share of foreigners falling from 65 percent to one-third, he added.
According to a statement from ÁKK, the main organizers of the bond issue were the financial institutions BNP Paribas, Citi, Erste Group, J.P. Morgan and OTP Bank.