Page 29 - Central & Southeast Outlook 2020

recent update from the ministry of finance from August.
“Although the State Treasury is not active in debt management, it has to be ready to borrow quickly if needed – it has in place several committed credit lines with banks that can quickly be drawn upon in case of need to safeguard the State’s ability to make payments,” according to the ministry.
“Based on the state’s limited funding needs, it has been more favourable to take long-term investment loans from the European Investment Bank and other IFIs than to issue bonds. EIB and other IFIs loan facilities typically have flexible and favourable terms and conditions, e.g. no fees, a long drawdown period, possibility to choose between different repayment terms up to 25 years, favourable interest rates and rights to make partial or full prepayment,” according to the ministry.
Estonia’s debt rating is at AA- with stable outlook (Fitch, last updated in October 2018), AA- with stable outlook (S&P, last updated in October 2012) and A1 with stable outlook (Moody’s, last updated in March 2010).
4.3 ​Debt - Hungary
Hungary's state debt-to-GDP ratio is set to fall from 68% to 65.5% in 2020 and the country should meet the Maastricht state debt rules by 2022​when the ratio is to fall below 60%. Hungary's constitution requires the year-end debt-to-GDP ratio to fall each year until it reaches 50%.
The state debt manager AKK plans to reduce the FX share of government debt in parallel with an increase in the shareholding of retail investors.
The midterm goal is to double the stock of government bonds held by households to HUF11 trillion by the end of 2023 from HUF7.5 trillion in 2019. FX debt could drop from 17% in 2019 to 15% in 2020.
This objective is in line with plans to lessen the country’s dependency on external financing and strengthen self-financing. The domestic ownership of public debt also supports the country’s income and current account balance. To meet these goals, AKK plans to maintain a positive real-term interest in retail securities and make them more attractive by reducing commissions.
The new MAP Plus retail bond drew record demand as subscriptions exceeded HUF3 trillion in six months. Dubbed the “superbond”, it offers the highest yield of all existing government bonds, except for the baby bond.
29​ CESE Outlook 2020​ ​ ​www.intellinews.com