BUDAPEST (Reuters) - Hungary has filed documents with the U.S. Securities and Exchange Commission for a potential dollar-based global notes issue, according to SEC filings on Monday.
The preliminary prospectus did not contain further specifics about the timing or size of the planned issue, which markets have been expecting after Hungary held an investor roadshow in Europe and the United States in the last few weeks.
The indebted central European country, whose talks with the International Monetary Fund and European Union about a financing backstop collapsed last year, intends to issue a total of 4.0-4.5 billion euros ($5.35-$6.02 billion) worth of foreign currency bonds this year to finance expiring debt.
Hungary last tapped international markets in 2011, and has been rolling over its debt from domestic issuance since then.
Despite the failed IMF talks and the Hungarian government’s unconventional economic policies, investors have been lured by the country’s high yields even though its debt is rated in the sub-investment grade category by all three main rating agencies.
Hungarian forint-denominated government bond yields, which hit close to 11 percent in January 2012 amid market turmoil when Budapest clashed with the IMF and the forint currency plunged, have come down to around 5.5-6.4 percent and there is still room for yields to fall as the central bank is pushing ahead with an easing cycle.
Over the weekend, rating agency Moody’s said it was keeping its ‘junk’ rating of Ba1 on Hungary’s debt and maintaining a negative outlook, blaming the country’s weak growth outlook.
Reporting by Krisztina Than and Sandor Peto; Editing by Michael Roddy