EIB HUF 20 billion Public Debt Issuance Programme

The European Investment Bank (EIB), the European Union's financing institution, is establishing a Hungarian Forint Public Debt Issuance Programme under which it will initially issue bonds up to HUF 20 billion (some ECU 100 million). The Programme will provide a framework to allow the Bank to enter the Hungarian domestic capital market and finance projects in Hungary with Forint loans.

Commenting on the operation, EIB President Sir Brian Unwin said: 'To meet an increasing demand from borrowers in Hungary for loans denominated in their national currency the EIB is establishing access to long-term funding sources through the Hungarian capital market. This programme - which is the first of its kind by the EIB in Central and Eastern Europe - will also promote the development and deepening of the Hungarian capital market. Having been a pioneer in the development of the Spanish, Portuguese and Greek capital markets, we are confident we can play a similar role in Hungary and elsewhere in the region.'

The Programme will be governed by Hungarian Law and should enable the EIB to raise Hungarian Forint in various market segments (fixed/floating/zero-coupon/index-linked) by using a variety of structures and tenors ranging from one to thirty years. Bonds will primarily be issued as Public Offerings to be listed on the Budapest Stock Exchange, but may also be issued by way of Private Placements. The Programme will provide the EIB with the necessary flexibility and cost-savings in raising Forint for the benefit of investment in Hungary.

The EIB has appointed ING Baring Rt. as arranger, and Inter-Európa Investment Ltd. as well as K&H Securities Ltd. as dealers of the Programme.

A Memorandum outlining the principles and basic procedures to be followed in the context of this Programme was signed today in Budapest by the EIB, the National Bank of Hungary and the State Banking and Capital Market Supervision.