Hungary has reportedly made a return to the international credit markets with a $3.25 billion sale of 5-year and 10-year bonds. Denominated in dollars, the 5-year notes are being priced at 335 bps over the yield available for U.S. treasury bonds, while the 10-year ones carry a 345 bps premium. The sale is a pointed reminder that Hungary sees its future as secure, even without a bail out deal with the IMF.
Talks with the IMF have stalled, and there’s now little belief that the government in Budapest actually wants to conclude a deal. The new bonds carry junk status according to the major ratings agencies.
