Some observed that Hungary's return to the capital markets would have been unthinkable only a year ago, when the government was still holding out the prospect of an IMF deal.

The success of the bond issue in large parts reflects the improvement in the global risk appetite since then, analysts added.

The spreads on the yields are still high, due to the continuous risk of Hungary’s economic policy and the junk status of the country's debt, according to Goldman Sachs.

This year Hungary has €5.1 billion debt maturing of which €3.6 billion will be paid back to the IMF.

The repricing of bond yields and the normalisation of global monetary policies could exert pressure on Hungary's public finances, Capital Economics noted, pointing to Hungary's vulnerability to external conditions and to capital flight.

The bond issue will provide support to the secondary forint and foreign-currency bond markets and have a favourable impact on the forint, CIB Bank said in a note to investors.

However, the bank added, uncertainties over the change of leadership at the MNB remain a serious burden capping the forint's potential gains.

Goldman Sachs also pointed to the risks to the forint stemming from high foreign-currency debt of households and the sustainability of the budget.

Source: Hungary Around the Clock

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