Péter Magyar’s government has raised €3 billion in foreign-currency debt, in a move closely tied to the anticipated release of previously frozen European Union funds.
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Hungary on Monday issued €3 billion in foreign-currency bonds on international markets. According to the Government Debt Management Agency (ÁKK), investor demand was exceptionally strong, with the offering nearly three times oversubscribed and priced without any issuance premium.
The ÁKK said the euro-denominated bonds were issued across two maturities. The 2032 tranche, with a five-year tenor, carries a 3.5 per cent coupon and a yield of 3.62 per cent. Meanwhile, bonds maturing in 2037 were priced with a 4.25 per cent coupon and a yield of 4.282 per cent. The agency emphasised that the securities were placed at secondary market yields, without any additional premium — a sign of favourable market sentiment.
EU funding needs behind borrowing
A key driver behind the issuance appears to be the pre-financing of EU funds. The new government faces substantial short-term liquidity demands, as roughly €10 billion available under the EU’s recovery facility is reimbursed only retrospectively by the European Commission. In practice, this requires the Hungarian state to fund investments and development projects upfront, with EU payments arriving only after completion.
The timing has also proved advantageous. Investor sentiment towards Hungary has improved in recent months, global yields have eased, and the ÁKK has reported strong demand for forint-denominated government securities. The robust appetite for the latest issuance reflects this more favourable environment.
While the €3 billion raise will add to public debt, it allows the state to finance projects whose costs are expected to be reimbursed by the European Union at a later stage. According to the ÁKK, the successful issuance underlines continued strong international investor interest in Hungarian government bonds.
Péter Magyar’s government to take last legal steps required by EU to access EU funds
After parliamentary sessions on Monday and Tuesday and a cabinet meeting on Wednesday, the second half of the week will focus on Brussels and ECOFIN, the finance minister said on social media on Monday.
The government will also take the final legal steps required by the European Union “to bring home the funds due to the Hungarian people and Hungary”, András Kármán added, referring to the upcoming Friday meeting of the EU’s Economic and Financial Affairs Council (ECOFIN), the Hungarian News Agency wrote.
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David Vitezy, the minister for transport and investment, told parliament on Monday before the agenda that negotiations with the European Commission have been concluded and the recovery plan text finalised. A final decision is expected at the EU finance ministers’ council meeting on Friday, with all signs pointing to a positive decision, he added.
At a consultation on June 26 with Kyriakos Pierrakakis, the president of the Eurogroup, Kármán and Prime Minister Péter Magyar discussed the results achieved in unlocking EU funds and the steps still needed for the funds to become accessible.
The Hungarian government recently submitted the amended Recovery and Resilience Facility (RRF) plan, which the commission accepted in the past few days. The final step is for the ECOFIN council of finance ministers to adopt this programme at its next meeting on July 10, the finance minister said at the time.
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