2011-04-26 13:15

BUDAPEST, Hungary - Hungary is interested in issuing bonds in China or to Chinese buyers to finance various investment projects in the longer term and has held talks with Chinese financial officials, the development ministry said on Friday.

During talks in China, the Hungarian Development Minister Tamas Fellegi discussed cooperating on development projects as well as issues of financing related to such projects, the ministry said.

"The long-term cooperation also raises the possibility, that after the opening of the Chinese capital markets, with time, investment financing can be done with capital market instruments," the ministry said.

Earlier, the website Portfolio.hu quoted Fellegi as saying late on Thursday that the issue will have to be made on the open market to avoid sending a misleading message to investors about Hungary's fiscal plans.

Fellegi said he had discussed the issue with banking leaders in Hong Kong as well as in Beijing, adding that the proceeds from such a debt issue will be used to finance development projects in Hungary, not to help roll over Hungary's debt, the website said.

He said such an issue will be organized by a leading Chinese bank, but he gave no further details.

China has increasingly been encouraging the yuan's use on a regional and global basis for trade purposes and has been promoting the development of an offshore yuan market in Hong Kong, which has seen a flurry of companies issuing yuan-denominated bonds.

China's Commerce Ministry declined to comment on the website's report.

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