Panda Bond Deal Highlights Strong Global Investor Confidence in Hungary

File photo of Viktor Orbán greeting the President of the Bank of China Ge Haijiao in May

On Tuesday, Hungary issued a series of Chinese renminbi-denominated (RMB) bonds with 3- and 5-year maturities, amid significant demand and favorable pricing. The successful transaction, organized by the Government Debt Management Agency, raised a total of 5 billion RMB in foreign currency bonds — the largest and longest-maturity sovereign bond issuance ever by Hungary on China’s domestic (onshore) market.

The Ministry for National Economy reported, this capital raising contributes to building liquidity reserves, which is especially important amid global economic difficulties and high uncertainty.

The statement says that after the successful foreign currency bond issuances of €2.5 billion in January and $4 billion in June, the Government Debt Management Agency executed the panda bond issuance — denominated in Chinese renminbi — in the international bond market with exceptionally high investor interest.

The total value of the issuance was 5 billion renminbi (cc. €595 million), making it Hungary’s largest and longest-maturity sovereign fundraising in China’s onshore market.

The 3-year bond, issued at RMB 4 billion  (cc. € 475 million), carried a coupon rate of 2.5%, while the 5-year bond, issued at RMB 1 billion (cc. € 119 million), had a coupon rate of 2.9%, based on the book-building/auction process.

The ministry also reported that in addition to the successful foreign currency issuance, both retail and institutional forint (HUF) bond markets performed in line with the financing plan. By mid-July, approximately 75% of the annual gross issuance target had been achieved on the retail market, while the institutional market reached 55%.

The time-proportional net completion rate — comparing actual to planned issuance by mid-July — exceeded 100% in the forint market.

Photo: Pixabay

The statement emphasized that this issuance continues to secure Hungary’s presence in one of the world’s largest capital markets and strengthens cooperation with China.

Expanding the investor base provides Hungary’s debt financing with broader foundations, increasing overall financial stability and ensuring secure financing of government operations.

Currently, 97% of Hungary’s foreign currency debt is denominated in euros and U.S. dollars. This RMB issuance further supports the Government Debt Management Agency’s diversification strategy.

The statement confirms, proceeds from the bond issuance will support the 2025 national budget, whose primary aim is to assist families and businesses.

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Via MTI; Featured image: MTI/Miniszterelnöki Kommunikációs Főosztály/Fischer Zoltán