27 December 2011

With the goal of protecting the achievements of the mortgage bond programme launched by the MNB in 2010, in a securities swap transaction on December 23rd 2011, HUF mortgage bonds were transferred to the MNB by the Pension Reform and Debt Reduction Fund in the nominal value of HUF 53.5 billion, in exchange for HUF government bonds so far held by the MNB. The securities to be involved in the swap transactions were determined on the basis of their actual secondary market prices in a manner to ensure that their market value and the average remaining maturity of the two portfolios should coincide. The Pension Reform and Debt Reduction Fund will use the government bonds transferred under the transaction to reduce the public debt, whereas the mortgage bonds received by the MNB will be treated in the same manner as the mortgage bonds purchased during its mortgage bond programme.