BUDAPEST:Hungarymay issue a dollar-denominated bond in international markets as soon as next month, national news agency MTI reported on Saturday citing multiple unnamed sources.
Officials at the Economy Ministry and government debt agency AKK were not immediately available for comment.
Hungary, the most indebted country in centralEurope, needs to roll over more than 4 billion euros worth of external debt this year on top of domestic maturities, including repayments of an international loan that saved it from collapse in 2008.
Budapestwants to secure a new multibillion-euro precautionary deal from the International Monetary Fund and the European Union to rein in borrowing costs from unsustainable levels after a series of ratings downgrades to "junk" status.
But AKK head Istvan Torocskei told Reuters earlier this week the debt agency may come to market with a dollar bond even before an agreement is reached, which has been delayed by a legal row with the EU over a string of new legislation.
Torocskei said the market looked very suitable for a new issue but did not elaborate on the potential timing.
In March and April 2011, after announcing fiscal reforms which boosted market sentiment,Hungarysuccessfully placed dollar-denominated bonds worth a total of $4.25 billion.
It has not issued foreign currency bonds this year, but forint-denominated bond sales have attracted good demand in recent weeks due to improved investor sentiment.
But government bond yields rose sharply in late Friday trade as some investors interpreted Torocskei's remarks as another sign thatBudapestis only playing for time with the prospect of an eventual IMF/EU agreement.
The country's conservative government is still in dispute withBrusselsover a raft of controversial laws, which the EU believes threaten the independence of the central bank and the judiciary.
The debate has blocked talks on a new financing deal whichBudapestneeds to shore up confidence after nearly two years of unorthodox policies that have includedEurope's highest bank tax and a controversial foreign currency mortgage relief scheme.
Copyright Reuters, 2012
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