Hungary is interested in issuing bonds in China or to Chinese buyers to finance various investment projects in the longer term and has held talks with financial officials there, the development ministry said on Friday. During talks in China, Hungarian Development Minister Tamas Fellegi discussed co-operating on development projects as well as issues of financing related to such projects, the ministry said in an e-mailed reply to Reuters questions.
"The long-term co-operation also raises the possibility, that after the opening of the Chinese capital markets, with time, investment financing could be done with capital market instruments - bond issues among other things," the ministry said. "The issuer of these bonds could be the state-owned development bank MFB, not the Hungarian state." Earlier website Portfolio.hu quoted Fellegi as saying late on Thursday that the issue would have to be made on the open market to avoid sending a misleading message to investors about Hungary's fiscal plans.
Fellegi said he had discussed the issue with banking leaders in Hong Kong as well as in Beijing, adding that the proceeds from such a debt issue would be used to finance development projects in Hungary, not to help roll over Hungary's debt, the website said, citing national news agency MTI. "We have not come here to convince the Chinese of debt financing, because we do not need that," said Fellegi, who is on an official visit in China. "But what we do use for debt financing, and is thus missing from the development budget, that could be replenished from here, too."
China's strict capital controls include rules that have restricted onshore bond issuance by non-Chinese borrowers to two supranational institutions, the Asian Development Bank and the International Finance Corp. Moreover, those entities have been required to use the proceeds within China. Officials and experts have given no indication that they are considering relaxing those rules.
Comments
Comments are closed for this article.