Eximbank Returns to the International Capital Market

Eximbank has issued an international bond worth EUR 500 million, Hungary’s official export credit agency announced on Wednesday. The day before, Fitch Ratings assigned the bonds a ‘BBB’ long-term rating equalized with Hungary’s sovereign rating. 

The bonds have a maturity of 7 years and an interest rate of 4.5 percent, and the transaction was arranged by Morgan Stanley. With the resources mobilized, the bank will continue to support the growth of the competitiveness of Hungarian businesses and their expansion in foreign markets, they added.

In a statement, Mihály Hoffmann, Deputy Chief Financial Officer of EXIM Hungary, said:

The success of our return to the international capital market this year is a reaffirmation of confidence in Hungary and the bank. With our current longer maturity issue, we have been able to attract stable funds that can effectively support the international ambitions and growth plans of Hungarian companies.”

They recalled that the current international bond issue follows two major transactions from 2023. In the spring of this year, a USD 1.25 billion bond issue with a maturity of almost 5 years and a yield of 6.32 percent was launched. This was followed in November by a transaction of more than EUR 1 billion, this time with a maturity of more than 5 years, in response to exceptional investor interest.

On Tuesday, Fitch Ratings assigned the bonds a ‘BBB’ rating. In its explanatory memorandum, the international rating agency pointed out that Eximbank’s long-term rating is also the same as Hungary’s sovereign rating.

The primary reason for this is that Fitch Ratings believes that the Hungarian authorities would show considerable willingness to support the financial institution in case of need,

the analysis of the preliminary rating said. Fitch considered the policy role of Eximbank, the state guarantee for its funding and the full state ownership of the bank as primary factors in its rating.

Via MTI, Featured image: Pixabay