Identifier
Created
Classification
Origin
10BUDAPEST53
2010-02-01 16:57:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Budapest
Cable title:
HUNGARY CONCLUDES $2 BILLION BOND ISSUE
how-toVZCZCXRO3244 RR RUEHIK DE RUEHUP #0053 0321657 ZNR UUUUU ZZH R 011657Z FEB 10 FM AMEMBASSY BUDAPEST TO RUEHC/SECSTATE WASHDC 4861 INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE RUCPDOC/DEPT OF COMMERCE WASHDC RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS BUDAPEST 000053
SENSITIVE
SIPDIS
DEPARTMENT FOR EUR/CE JMOORE, EB/OMA, INR/EC, TREASURY FOR
ERIC MEYER, JEFF BAKER, LARRY NORTON; COMMERCE FOR SSAVICH
E.O. 12958: N/A
TAGS: EFIN ECON PREL HU
SUBJECT: HUNGARY CONCLUDES $2 BILLION BOND ISSUE
UNCLAS BUDAPEST 000053
SENSITIVE
SIPDIS
DEPARTMENT FOR EUR/CE JMOORE, EB/OMA, INR/EC, TREASURY FOR
ERIC MEYER, JEFF BAKER, LARRY NORTON; COMMERCE FOR SSAVICH
E.O. 12958: N/A
TAGS: EFIN ECON PREL HU
SUBJECT: HUNGARY CONCLUDES $2 BILLION BOND ISSUE
1. (U) On January 26, Hungary successfully concluded a 2
billion dollar bond auction. There was significant demand
for the 10-year dollar denominated bond, with bids in excess
of $7 billion from more than 250 investors. Finance Minister
Oszko commented that the GOH was pleased with the pricing - a
yield of 6.25 percent, or 265 basis points over comparable
U.S. Treasury securities. K&H analyst Gyorgy Barcza noted
that the pricing is in line with Hungary's current credit
default swap (CDS) spreads.
2. (U) Citi and Deutsche Bank were lead managers of the deal,
which followed a Finance Minister-led investor road show to
the U.S. and UK. Deutsche Bank noted that buyers were
largely U.S. money managers and insurance companies.
3. (U) The value of this issuance is roughly equivalent to
the amount of Hungary's maturing foreign currency denominated
debt for 2010. Hungarian Debt Management Agency (AKK) and
Finance Ministry officials have indicated they do not want to
further increase the share of Hungary's foreign currency
denominated debt, which remains well above the 30 percent
target set by AKK due to draw-downs of the IMF and EU loans.
4. (SBU) Comment. Together with the successful July 2009 EUR
1 billion auction, this week's issuance demonstrates a
continued improvement in investor risk appetite toward
Hungary, as well as Hungary's increasing ability to return to
debt markets to finance its expiring debt. An IMF and EU
team is expected in mid-February to conduct the final review
prior to April's parliamentary elections of Hungary's
implementation of its commitments under the $25.1 financial
stabilization package. This week's successful auction makes
it likely that the GOH will again decline to draw-down the
next scheduled disbursement under the agreement. End
comment.
KOUNALAKIS
SENSITIVE
SIPDIS
DEPARTMENT FOR EUR/CE JMOORE, EB/OMA, INR/EC, TREASURY FOR
ERIC MEYER, JEFF BAKER, LARRY NORTON; COMMERCE FOR SSAVICH
E.O. 12958: N/A
TAGS: EFIN ECON PREL HU
SUBJECT: HUNGARY CONCLUDES $2 BILLION BOND ISSUE
1. (U) On January 26, Hungary successfully concluded a 2
billion dollar bond auction. There was significant demand
for the 10-year dollar denominated bond, with bids in excess
of $7 billion from more than 250 investors. Finance Minister
Oszko commented that the GOH was pleased with the pricing - a
yield of 6.25 percent, or 265 basis points over comparable
U.S. Treasury securities. K&H analyst Gyorgy Barcza noted
that the pricing is in line with Hungary's current credit
default swap (CDS) spreads.
2. (U) Citi and Deutsche Bank were lead managers of the deal,
which followed a Finance Minister-led investor road show to
the U.S. and UK. Deutsche Bank noted that buyers were
largely U.S. money managers and insurance companies.
3. (U) The value of this issuance is roughly equivalent to
the amount of Hungary's maturing foreign currency denominated
debt for 2010. Hungarian Debt Management Agency (AKK) and
Finance Ministry officials have indicated they do not want to
further increase the share of Hungary's foreign currency
denominated debt, which remains well above the 30 percent
target set by AKK due to draw-downs of the IMF and EU loans.
4. (SBU) Comment. Together with the successful July 2009 EUR
1 billion auction, this week's issuance demonstrates a
continued improvement in investor risk appetite toward
Hungary, as well as Hungary's increasing ability to return to
debt markets to finance its expiring debt. An IMF and EU
team is expected in mid-February to conduct the final review
prior to April's parliamentary elections of Hungary's
implementation of its commitments under the $25.1 financial
stabilization package. This week's successful auction makes
it likely that the GOH will again decline to draw-down the
next scheduled disbursement under the agreement. End
comment.
KOUNALAKIS