The trouble with Postabank
To syndicate heads in London and Frankfurt, it seemed like an act of suicidal machismo. The day after the Brazilian real had been devalued the Hungarian State Treasury launched the first ever 10-year local currency bond out of eastern Europe - a Ft12.5 billion ($58 million) domestic transaction which it hoped would be bought by European investors looking for yield.
"Totally insane," was the comment of one bond salesman when told that the deal was going ahead. The following morning, Laszlo Borbery, head of the Hungarian debt management agency, rushed to his office to discover the humiliating news - the issue had been six-times over-subscribed.
Growing reputation
The deal's success underlines Hungary's growing reputation among international investors. Following the Russian devaluation, almost every eastern European fund has increased its Hungarian weighting. Julius Baer Investment Fund Services, for example, now has 41% of its $40 million Co-op Central...
