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FHB Bank / FHB Mortgage Bank Co. Plc. on the Budapest Stock Exchange
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FHB Mortgage Bank Co. Plc. on the Budapest Stock Exchange

FHB:

  • One of the most active issuers on the Budapest Stock Exchange: winner of the BSE’s “Debt Securities Issuer of the Year” award 8 times in 11 years.
  • The first Hungarian mortgage bank (1997).
  • A pioneer of the mortgage bond market; the first mortgage bond was issued by FHB in 1998 (5-year, private placement mortgage bond with fixed, 15.5% interest, in a total nominal value of HUF 780 million). The Hungarian capital market first learned what a mortgage bond is by the issuances of FHB.
  • Publishing the first mortgage bond issuance program in Hungary (2002); in July 2002 the BSE honoured FHB with the Issuer of the Month Award, to celebrate the fact that the total nominal value of FHB securities listed on the exchange had exceeded HUF 30 billion.
  • Issuer of the first (2003) structured (SPV) mortgage bond, for which FHB received Euromoney’s “Best Structured Borrower” award in 2004.
  • Launching Hungary’s first (2003) international, Euro Mortgage Securities and Euro Medium Term Note (EMTN) issuance program.

Since 2001 FHB has constantly introduced its securities on the Budapest Stock Exchange (BSE), at first only mortgage bonds, and then from 2007 senior unsecured bonds as well, while its shares have also been traded on the exchange since 2003. Today the different types of mortgage bonds issued by FHB exceed well the hundred, and more than 25 series of its senior unsecured bonds have also been issued.

The first listed FHB security was the FJ07NF01 mortgage bond, which the Bank issued in April 2001. The bond had a six-year maturity and a 9.6% fixed interest. In four tranches FHB issued a total of more than HUF 6.3 billion forints worth of this security, with the first tranche amounting to HUF 2.4 billion.

In the past 11 years FHB has arranged close to 160 securities auctions in the BSE’s MMTS system, or on average of more than 14 auctions a year. At the auctions, securities with a total nominal value of close to HUF 486 billion were successfully sold, while at buyback auctions FHB withdrew securities in a value of almost HUF 60 billion. Together with the issuance transactions through subscription procedures, in the last 11 years FHB debt securities reached a total value of more than HUF 585 billion, or over HUF 53 billion a year – mostly mortgage bonds, but with a smaller proportion of senior unsecured bonds – have come to be listed on the BSE.

The busiest year was 2008, when the Bank arranged issuance and buyback auctions on the Budapest Stock Exchange for a total of 48 securities, but there was also a year in which there were no BSE offerings at all (2006), and the funding took place in the international markets. The volume of the mortgage bonds was at its highest in 2008, when it approached HUF 500 billion in total, having steadily increased from HUF 780 million in 1998. From its establishment to the present day, FHB has sold different securities with a total nominal value of HUF 1.212.065.700.000 to investors.

This considerable level of activity was also awarded by the BSE: FHB has won the BSE’s “Debt Securities Issuer of the Year” award 8 times in 11 years.

Issuing its securities FHB Mortgage Bank Co. Plc. traditionally fits in with investor requirements: in accordance with its issuance program published on 13 February 2012, it builds up larger and more liquid series of bonds, listed on the stock exchange. FHB will continue to pursue its fundraising policy in the future.

Ticker code structure
The ticker code structure for FHB securities has remained unchanged since the issuance of the FJ07NF01 mortgage bond in 2001. The most important characteristics of the given security are incorporated into the ticker code as follows:

  • the first letter “F” means the issuer, FHB;
  • the second is “J” or “K” (mortgage bond (jelzáloglevél) or senior unsecured bond (kötvény), respectively);
  • the following number consists of the last two figures of the year of maturity;
  • of the next two letters, the first indicates whether the series has been issued publicly (N, nyilvános) or privately (Z, zártkörű), while the second can express a fixed (F) or variable (V) rate, or possibly a discount (D) or inflation-indexed (I) security;
  • finally, the last two numbers inform us about the order in which identical securities, with the same maturity and issued in the same manner, have been issued (e.g.: the FJ07NF02 series: a mortgage bond, maturing in 2007, publicly issued, with a fixed rate of interest, but issued later as the second).

What is a mortgage bond?

A mortgage bond, in Hungary, is a transferable security that may only be issued by a mortgage credit institution in accordance with the Act on Mortgage Credit Institutions and Mortgage Bonds (Mortgage Act). The mortgage bond is covered by a collateral pool of mortgages on real estate, which means that the lending, the valuation of the collaterals and the coverage of mortgage bonds are determined by law, and the continuous existence of the collaterals is monitored by a property supervisor in accordance with the law. The Mortgage Act strictly regulates not only the collateral for the mortgage bond, but also the operating frameworks of their issuer FHB Mortgage Bank Co. Plc., as a mortgage credit institution, and this increases further the security of the notes. In addition to the mandatory collaterals, on the top of the minimum statutory requirements FHB undertakes also a 13% overcollateralization, plus a 12 months liquidity buffer to ensure the redemption of the principal and interest of the mortgage bonds maturing at any given time.

The benefits of mortgage bonds:

  • low-risk, due to the underlying real estate collateral and strict legislation,
  • reliable medium and long-term investment, with 2-15 year maturity,
  • higher potential yields than government securities of a similar maturity.
Debt Securities Issuer of the Year - 2011 Debt Securities Issuer of the Year - 2010
Debt Securities Issuer of the Year - 2008 Debt Securities Issuer of the Year - 2005
Debt Securities Issuer of the Year - 2004 Debt Securities Issuer of the Year - 2003
Debt Securities Issuer of the Year - 2002 Debt Securities Issuer of the Year - 2001

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