Hungary successfully issued a major series of renminbi-denominated sovereign bonds on Tuesday, drawing strong investor interest and favourable pricing. The total value of the issuance reached 5 billion RMB (approx 595 million euros), making it the country’s largest and longest-maturity sovereign bond offering on the Chinese onshore market to date.
The transaction, organized by Hungary’s Debt Management Agency (ÁKK), marks a significant step in diversifying Hungary’s financing sources. According to the Ministry of National Economy, the bond sale strengthens the country’s liquidity reserves, an important buffer in light of ongoing global economic turbulence.
Following successful euro and dollar bond issuances earlier this year, this ‘panda bond’ issuance also generated considerable interest, particularly from Chinese institutional investors. The three-year tranche, worth 4 billion RMB, carries a 2.5 per cent coupon, while the five-year, 1 billion RMB tranche was priced at 2.9 per cent.
The proceeds, as with Hungary’s previous foreign currency borrowings, will be swapped into euros. The issuance not only helps finance the 2025 budget, but also enhances Hungary’s presence on one of the world’s largest capital markets.
Despite rising interest rates and global uncertainties, Hungary continues to attract confidence from both Western and Eastern investors. The success of this bond issuance, alongside those earlier this year, underscores persistent international trust in the country’s economic stability. All three major credit rating agencies still classify Hungary as investment grade.
The Ministry noted that Hungary’s RMB issuance aligns with a broader debt management strategy aimed at diversification and flexibility. With 97 per cent of foreign debt still denominated in euros and dollars, the renminbi bond adds further depth to Hungary’s funding toolkit and allows for mid-year optimization, including potential debt buybacks.
The panda bond issue also reaffirms Hungary’s commitment to strengthening economic relations with China, while broadening its investor base. This multi-channel financing approach is designed to bolster the state’s fiscal stability and secure long-term economic resilience.
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Author: Ádám Bráder
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