Hungary to terminate residency bonds

Hungary was terminating a set of bonds that granted foreign purchasers the right to reside in the country, thanks to favorable financial situation, a government agency said on Thursday.

The bonds would be available until March 31 and then taken off the market, according to a statement by Hungary's Government Debt Management Agency (AKK).

The bond was originally established in June 2013, as a low-cost and secure way to service Hungary's foreign currency debt, AKK said.

Over a billion euros worth of bonds were sold, saving Hungary a billion and a half forints (about 5.19 million dollars) in interest payments.

The construct also contributed to Hungary's improved debt rating, AKK said.

By the end of last year, 17,009 residency bonds with a total face value of 1.239 billion euros have been sold through several agencies authorized by the government to manage the sales.

Opposition parties have charged the Hungarian government with corruption.

The socialist MSZP and the green LMP both issued statements claiming that the government had resolved to terminate the bonds to erase evidence of the wrongdoing. The government has flatly denied these charges.

The Hungarian Investment Immigration Program allows third country nationals to acquire Hungary's permanent residency status through investing in Special Hungarian Government Bonds that have a minimum 5-year maturity.

The minimum initial investment by each subscriber was 250,000 euros until the end of 2014 and 300,000 euros after that time. Endit