Page 30 - Central & Southeast Outlook 2020

Funding for the MAP Plus bonds came from investment funds, bank deposits and from redeeming other government securities. Only a smaller portion came from cash, which was supposed to be the top priority. Although the finance ministry has categorically denied reports of changing the pricing of the bond, the head of the state debt manager has made ambiguous statements in this regard.
The government is reportedly planning to make the baby bond more attractive to lessen demand for the new retail bond.
Overall, the positive impact of MAP Plus is that it contributes to keeping the savings rate high.
The AKK is also planning to launch a new bond targeted at retail investors with a maturity of between five and 10 years. The rollout of the new pension bond, delayed because of the superbond is expected in 2020.
Rising demand for government securities will continue to exert pressure on investment funds and banks in 2020, diverting assets toward government bonds. The success of MAP Plus has had a cooling effect on the real estate market as well.
On the institutional market, the debt manager's aim is to increase the term of the debt and to further diversify the investor base and keep the maturity of forint debt above four years
AKK is considering the possibility of issuing green bonds denominated in Japanese yen and/or in Chinese yuan, and in line with recent practice, it will manage FX debt actively, depending on the liquidity position of the central budget and the market situation.
4.4 ​Debt - Latvia
Latvia has seen low and declining levels of debt in recent years, ratings agencies note.
“Benefitting from the ultra-low interest rates in the eurozone, Latvia has reduced its interest bill over the past years as a share of government revenue, but also in absolute terms. At the same time, the authorities have actively pursued a strategy of prolonging the overall maturity profile by issuing several bonds with 30-year maturities,” S&P said in March.
“Even with scheduled pre-finance operations - there are large Eurobond redemptions in 2020 and 2021 - we expect a decline in the general government debt/GDP ratio to 34.3% in 2021 from 35.9% in 2018 and compared with the current 'A' median of 48%. Downside risks to debt and fiscal
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