Hungary builds goodwill with China, may tap onshore bond market after offshore issue

Hungary sold a three-year CNY 1 billion (€136.8 million) offshore yuan bond yesterday, and there is chance that it could issue an onshore Panda bond in China this year as well, economy minister Mihály Varga told the press yesterday, according to Hungarian news agency MTI.

Hungary successfully issued 3Y bond in CNY at 6.25% on Thursday, becoming the first CE country, which issued its debt in the Chinese currency. The one billion off-shore yuan bond was two and a half oversubscribed.

The deal was more costly to Hungary than an equivalent deal in U.S. dollars would have been, say bankers. But it warms relations with China just as Hungary wants to expand trade with the nation and establish Budapest as a yuan hub in Eastern Europe. The minister called the issue both a milestone for Hungarian-Chinese financial relations and a test for getting to know the market and establishing ties and institutional connections.