08 August 2019 / Company news

Scope awarded major contract from the Hungarian central bank

Hungary’s central bank has launched a HUF 300bn corporate bond-buying programme. Scope has been hired to rate the applicant issuers.

The leading European rating agency Scope has won a mandate from the Central Bank of Hungary to conduct the ratings of applicant issuers and the bonds they will issue. "Scope was successful in the bidding process and convinced the central bank with its expertise," said Torsten Hinrichs, COO of Scope Group. "The distinction is that we offer a differentiated approach and a new perspective that accounts for regional specificities. For our clients, this unique perspective means real added value."

“The Bond Funding For Growth Scheme (BGS)” of Hungary’s central bank is similar in structure to the European Central Bank’s own bond purchase programme. The total volume of HUF 300bn corresponds to roughly EUR 921m, or 0.7% of Hungary's GDP. Purchases will comprise bonds issued by non-financial Hungarian companies. The bonds will be denominated in Hungarian forint and have maturities of between 3 and 10 years. Acceptance into the programme requires an issuance rating of at least B+. The ratings for bond issues – within the framework of BGS – will be made public. The bond-buying programme was launched on 1 July 2019.

The Central Bank of Hungary indicated that the programme’s aim is to diversify financing sources for Hungarian companies. In other words, to provide new ways to raise capital in addition to the classic bank loan, including creating liquidity in the market for corporate bonds. The central bank will buy up to 70% of a single bond.

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