The Government Debt Management Agency (AKK) puts next year’s central budget net financing requirement at HUF 3,332bn, to be financed by HUF 1,913bn of net securities issues as well as by using liquidity reserves created in 2020 and a bond issue in November 2020, a financing plan published on Monday shows.

Next year’s gross issuance is targeted at HUF 8,600bn, including switch auctions. AKK noted the target is well under the HUF 13,472bn gross issuance in 2020 and the annual average HUF 10,264bn of gross issuance over the past five years.

On the primary market, AKK aims to further extend the average term-to-maturity of debt and plans no auctions of three-year bonds while raising the volume of switch auctions. It also wants to further strengthen investor diversification by targeting Asian investors and the Environmental, Social and Governance (ESG) markets, while introducing a new 30-year green forint-denominated bond at auctions.

On the retail market, AKK targets a net HUF 1,000bn increase in households’ holdings of government securities, supported by bigger digital sales. It aims to raise households’ holdings of state debt to HUF 11,000bn by 2023 and to extend the average term-to-maturity of that debt.

AKK sees no need to issue FX bonds on international markets in 2021 because of pre-financing in 2020. However, it takes into account FX loans, such as ones from the EIB and the EU’s SURE programme, as well as other FX funding „supporting the goals of debt management”, such as sales of the Premium Euro Government Security for retail investors.

AKK wants to reduce the share of FX debt through active management of the FX maturity profile.