The State Debt Management Center announced new and renewed government securities. The Bonus and Premium Hungarian Government Bonds can be purchased from September 29.
Taking into account the current economic situation and the needs of investors, the ÁKK is re-introducing the Bonus Hungarian Government Bond, which has not been traded since 2019. It is definitely new that, compared to the previous preliminary announcement, the ÁKK does not link the interest base to the 12-month but to the 3-month Discount Treasury Bill. In practice, this means that
four interest payment dates are established each year, which can make government bonds more attractive to the public.
The Premium Hungarian State Paper will also be renewed, with the base denomination of the new series changing from HUF 1,000 to HUF 1. The biggest change for both papers will be the form of interest. ÁKK uses "hybrid" interest, i.e
for the Premium Hungarian State Paper, it pays a fixed interest rate of 11.75 percent per annum in the first interest period, the same for the Bonus Hungarian State Paper at 11.32 percent per annum.
The two government securities thus only become classic, variable-interest government securities from the second period,
whose interest determination is the same as the interest determination of the previous series, i.e. it provides a different interest premium for each series above the average consumer price index of the previous year.
Customers can therefore expect the first interest payment surprisingly soon, in the case of the series expiring in 2027 in January 2023, and in the case of the series expiring in 2029 at the end of February 2023. For the second interest period, the interest base will be the annual average consumer price index of 2022, and the rate of the interest premium will be +0.75 percent for Premium Hungarian Government Bonds maturing in 2027 and +1.50 percent for those maturing in 2029.
The announcement of the ÁKK also reports on the sales limit. According to this, the two government securities
a distributor may sell a series of government securities with a total nominal value of a maximum of HUF 250 million from one type of government securities series to an investor.
This corresponds to the international practice - used in the USA, Great Britain and Ireland, among others - according to which the quantity that can be purchased by a retail investor is maximized in the case of countries that distribute the most retail government securities.
As they write: ÁKK's strategic goal is to bring the conditions of the highly successful retail government bond program closer to international best practice, as well as to increase the number of customers so that as many retail savers as possible have the opportunity to purchase the advertised high-interest, risk-free, tax-free retail government bonds.
Both government securities can be purchased by private individuals from September 29 online or in person at government securities distributors.
Source: mandiner/MTI
Featured image: MTI/Péter Lakatos
