Lively demand for the first mortgage bond issue of the year at MBH Jelzálogbank's auction

Bid worth HUF 9.83 billion on the issue of a member of the MBH Group

The first mortgage bond issue of the year took place on Tuesday amid lively demand, with MBH Jelzálogbank's auction, originally announced at HUF 6 billion, attracting a demand of almost HUF 9.83 billion from investors, of which the bank finally accepted some HUF 8.75 billion.⁣

MBH Jelzálogbank started issuing a new series of mortgage bonds in its auction held on 28 January: for the first tranche of the MJ31NF02 fixed-rate mortgage bond with a maturity date of 26.03.2031 at 7.25 percent bids were made by capital market participants for a total amount of HUF 9.83 billion, which was well above the amount offered, of which the bank finally accepted HUF 8.75 billion, taking into account the market outlook. ⁣

"Today's issuance was the first mortgage bond auction this year, which is significant for us, among other reasons, because it gives an indication of market sentiment at the beginning of the year. The volume of bids received and the outcome of the auction confirm that despite the fragile capital market environment and the risk-averse approach of institutional investors, there is still demand for mortgage bonds. This is important feedback for us, as the successful issuances will allow MBH Jelzálogbank to raise the long-term fixed funding at more favourable pricing, which is necessary to maintain the current strong dynamics of mortgage lending,"⁣ said Dr Gyula Nagy, CEO of the credit institution belonging to the MBH Group.

MBH Jelzálogbank will use the funds raised through the issuance of mortgage bonds to provide refinancing loans to its partner banks, thereby supporting their mortgage lending activities, primarily to the retail sector. In 2024, the credit institution issued mortgage bonds worth almost HUF 60 billion in eight public stock exchange auctions. Green mortgage bonds accounted for almost HUF 15 billion of the total volume issued, representing 42 percent of the total market volume of green mortgage bonds issued in 2024.