Just as Hungary is worrying foreign investors with a plan to help households laden with foreign currency mortgages – likely to prove expensive for its banks – its trade bank has come up with an interesting structure for a planned bond.
State-owned Eximbank has been holding a roadshow this week for a two-part bond, with one part of the bond guaranteed by the World Bank’s risk insurance arm, Miga.
It’s unusual for Miga, which has been operating since 1988, to guarantee sovereign debt.
The Miga-guaranteed bond tranche will have a top investment grade AAA rating, while the other part of the debt will have a BB+ rating, in line with the rating for Hungary.
The guarantee is likely to make the higher-rated bond tranche appeal to the sort of investors who would normally be unlikely to touch Hungarian debt with a bargepole.