Registration Statement by a Foreign Government or Political Subdivision — Sch. B Filing Table of Contents
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‘S-B’ — Registration Statement by a Foreign Government or Political Subdivision Document Table of Contents
As filed with the Securities and Exchange Commission on December 2, 2010
Registration No. 333-[]
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT
UNDER
SCHEDULE B
OF
THE SECURITIES ACT OF 1933
THE REPUBLIC OF HUNGARY
(Name of Registrant)
Consulate General of the Republic of Hungary in New York
223 East 52nd Street New York, NY10022
(Name and address of authorized agent in the United States)
It is requested that copies of notices and communications from the Securities and Exchange Commission be sent to:
Approximate date of commencement of proposed sale to the public: From time to time after this
Registration Statement becomes effective.
The securities being registered hereby are to be offered on a delayed or continuous basis
pursuant to Release Nos. 33-6240 and 33-6424 under the Securities Act of 1933.
CALCULATION OF REGISTRATION FEE
C:
Title of Each Class
Proposed Maximum
Proposed Maximum
of Securities
Amount to Be
Aggregate Offering
Aggregate Offering
Amount of
to be Registered
Registered
Price Per Share(1)
Price(1)(2)
Registration Fee(3)
C:C:
Debt Securities
$5,000,000,000
100%
$5,000,000,000
$356,500
C:
(1)
Estimated solely for the purpose of calculating the registration fee.
(2)
Exclusive of accrued interest, if any.
(3)
This Registration Statement and the Prospectus included herein relate to $5,000,000,000
aggregate principal amount of debt securities, of which $500,000,000 aggregate principal
amount of debt securities has been previously registered under the Registrant’s Registration
Statement No. 333-131950 filed on February 21, 2006. $53,500 of the total registration fee
paid by the Registrant with Registration Statement No. 333-131950 and calculated in accordance
with the fees then in effect (which relates to
$500,000,000 aggregate principal amount of debt securities) has been applied to the registration
fee to be paid with this Registration Statement pursuant to Rule 457 under the Securities Act of
1933. The remaining fee of $303,000 (calculated in accordance with the fees currently in effect)
is being paid herewith for an aggregate principal amount of $4,500,000,000 of additional debt
securities to be registered hereunder.
The Registrant hereby amends this Registration Statement on such date or dates as may be
necessary to delay its effective date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission, acting pursuant to
said Section 8(a), may determine.
Pursuant to the provisions of Rule 429 under the Securities Act of 1933, the Prospectus
contained herein also relates to debt securities having an aggregate principal amount of
$500,000,000 or the equivalent thereof in one or more other currencies or currency units,
registered under the Registrant’s Registration Statement No. 333-131950 under Schedule B and not
previously sold in the United States. In the event any previously registered debt securities are
offered prior to the effective date of this Registration Statement, they will not be included in
any prospectus hereunder.
This Registration Statement is being filed pursuant to Rule 429. This Registration Statement
and the Prospectus included herein and constituting a part hereof relate to debt securities having
an aggregate principal amount of $5,000,000,000, of which $500,000,000 aggregate principal amount
of debt securities has been previously registered under the Registrant’s Registration Statement No.
333-131950 under Schedule B and not previously sold in the United States. In the event any
previously registered debt securities are offered prior to the effective date of this Registration
Statement, they will not be included in any prospectus hereunder.
In the event that the Republic elects to offer securities on different terms or in a different
manner from that specified in the Prospectus included herein, the securities may be offered from
time to time pursuant to Release Nos. 33-6240 and 33-6424 under the Securities Act of 1933 as
separate issues of debt securities on terms and in the manner to be specified in the separate
Prospectus Supplements to be delivered in connection with each such offering and filed with the
Securities and Exchange Commission pursuant to Rule 424(b).
Between Schedule B of the Securities Act of 1933 and the Prospectus
Schedule B Item
Headings in Prospectus
1.
Cover Page
2.
Use of Proceeds
3.
Description of Debt Securities*
4.
*
5.
*
6.
**
7.
Authorized Representative
8.
Cover Page; Use of Proceeds**
9.
Cover Page**
10.
Cover Page**
11.
***
12.
Validity of the Debt Securities
13.
***
14.
***
Notes:—
*
Additional information included or to be included in the Republic’s Annual Report on Form
18-K filed with the Securities and Exchange Commission, as amended from time to time and
incorporated by reference herein.
**
Information to be provided from time to time in prospectus supplements to be delivered in
connection with the offering of debt securities.
***
Information included in Part II to this Registration Statement or as an exhibit hereto or to
be provided from time to time by one or more amendments to this Registration Statement.
The information in this prospectus is not complete and may be changed. The Republic may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
We may offer up to U.S.$5,000,000,000 of our debt securities for sale from time to time based
on information contained in this prospectus and various prospectus supplements. The securities
will be direct, unconditional, unsecured and general obligations of the Republic of Hungary. The
securities will rank equally in right of payment with all other unsecured and unsubordinated
obligations of the Republic of Hungary and will be backed by the full faith and credit of the
Republic of Hungary.
We will provide specific terms of these securities in supplements to this prospectus. You
should read this prospectus and any supplement, including any information incorporated herein or
therein by reference, carefully before you invest. This prospectus may not be used to make offers
or sales of securities unless accompanied by a supplement.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy of this prospectus. Any
representation to the contrary is a criminal offence.
This prospectus is part of a registration statement that the Republic of Hungary (the
“Republic”) filed with the Securities and Exchange Commission (the “SEC”) under a “shelf”
registration process. Under this shelf process, the Republic may sell, from time to time, any of
the debt securities described in this prospectus in one or more offerings up to a total U.S. dollar
equivalent amount of U.S.$5,000,000,000. This prospectus provides you with basic information about
the Republic and a general description of the debt securities the Republic may offer. Each time
the Republic sells debt securities under this shelf process, it will provide a prospectus
supplement that will contain updated information about the Republic, if necessary, and specific
information about the terms of that offering. Before you invest, you should read both this
prospectus and any prospectus supplement, including any information incorporated herein or therein
by reference. References herein to the prospectus are also to the prospectus supplement.
Any information in this prospectus may be updated or changed in a prospectus supplement, in
which case the more recent information will apply.
FORWARD-LOOKING STATEMENTS
This prospectus, any prospectus supplement and the documents incorporated by reference in this
prospectus and any prospectus supplement include or may include forward-looking statements within
the meaning of Section 27A of the U.S. Securities Act of 1933. All statements other than
statements of historical facts included in this prospectus or in a prospectus supplement regarding
(among other things) the Republic’s economy, fiscal condition, politics, debt or prospects, may
constitute forward-looking statements. Forward-looking statements generally can be identified by
the use of forward-looking terminology such as “may,”“will,”“expect,”“intend,”“estimate,”“anticipate,”“believe,”“continue,”“could,”“should,”“would” or similar terminology. Such
statements include, but are not limited to, statements in this prospectus which refer to:
•
expected budget for any future fiscal year of the Republic;
•
estimated future budget deficits;
•
future deregulation of prices;
•
future privatizations and revenues from them;
•
future development of the current account deficit;
•
future GDP growth or contraction, as applicable;
•
future development and sustainability of health care and pension systems;
•
the Convergence Programme, future participation of Hungary in ERM II, and the
future introduction of the Euro as the official Hungarian currency; and
•
expected future payments on public debt.
By their nature, forward-looking statements involve risk and uncertainty, and other factors
described in the context of such forward-looking statements could cause actual results and
developments to differ materially from those expressed in or implied by such forward-looking
statements. Although the Republic believes that expectations reflected in its forward-looking
statements are reasonable at this time, there can be no assurance that such expectations will prove
to have been correct.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Republic files Annual Reports on Form 18-K with the SEC on a voluntary basis. The
Republic’s Annual Report on Form 18-K for the fiscal year ended December 31, 2009 filed with the SEC on November 30, 2010 and Amendment No. 3 to the Republic’s Annual Report on Form 18-K for the fiscal year ended December 31, 2008, also filed with the SEC on November 30, 2010, are hereby incorporated by reference into this
prospectus and any accompanying prospectus supplement. Each Annual Report on Form 18-K (including
all exhibits to the Annual Report) and any amendments to the Form 18-K on Form 18-K/A (including
all exhibits) filed with the SEC by the Republic on or subsequent to the date of this prospectus
and prior to the termination of any offering of the debt
securities will be deemed to be incorporated by reference into this prospectus and into any
accompanying prospectus supplement and to be a part of this prospectus and of any prospectus
supplement from the date of the filing of the Form 18-K or Form 18-K/A and will supersede and
replace any prior Form 18-K. As used in this prospectus, the term “Annual Report” will refer to
any Form 18-K incorporated in this prospectus not superseded or replaced by operation of the
preceding sentence.
Any statement in this prospectus or contained in a document that is incorporated by reference
into this prospectus will be deemed to be modified or superseded for purposes of this prospectus or
any accompanying prospectus supplement to the extent that a statement contained in the accompanying
prospectus supplement or in any other subsequently filed document that is deemed to be incorporated
by reference into this prospectus modifies or supersedes the statement. Any statement modified or
superseded will not be deemed, except as modified or superseded by a document incorporated by
reference into this prospectus, to constitute a part of this prospectus or any accompanying
prospectus supplement.
The Republic is a subscriber to the International Monetary Fund’s Special Data Dissemination
Standard, or “SDDS”, which is designed to improve the timeliness and quality of information of
subscribing member countries. The SDDS requires subscribing member countries to provide schedules
indicating, in advance, the date on which data will be released, the so-called “Advance Release
Calendar”. For the Republic, precise dates or “no-later-than dates” for the release of data under
the SDDS are disseminated no later than 12 months in advance through the Advance Release Calendar,
which is published on the Internet under the International Monetary Fund’s Dissemination Standards
Bulletin Board. Summary methodologies of all metadata to enhance transparency of statistical
compilation are also provided on the Internet under the International Monetary Fund’s Dissemination
Standard Bulletin Board. The Internet website is located at
http://dsbb.imf.org/Applications/web/sddscountrycategorylist/?strcode=HUN. The website and any
information on it are not part of this prospectus. All references in this prospectus to this
website are inactive textual references to this URL, or “uniform resource locator”, and are for
your information only.
WHERE YOU CAN FIND MORE INFORMATION
The Republic files an annual report on Form 18-K with the SEC. The annual report includes
financial, statistical and other information concerning the Republic. You can inspect and copy
this report at the Office of Investor Education and Advocacy maintained by the SEC at 100 F Street,
N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the
SEC’s Office of Investor Education and Advocacy. You can also obtain copies of the annual report
at prescribed rates from the SEC’s Office of Investor Education and Advocacy. All filings made
after November 4, 2002 are also available online through the SEC’s EDGAR electronic filing system.
Access to EDGAR can be found on the SEC’s website at www.sec.gov.
ENFORCEMENT OF JUDGMENTS
It may be difficult for investors to obtain or enforce judgments against the Republic. The
Republic is a foreign sovereign. Foreign sovereigns are generally immune from lawsuits and from
the enforcement of judgments under U.S. law. Foreign sovereigns may waive this immunity and
limited exceptions to this rule are spelled out in the U.S. Foreign Sovereign Immunities Act of
1976.
The Republic will be submitting to the jurisdiction of courts present in New York City for
lawsuits brought by investors on the debt securities. Thus, the Republic will specifically agree
that these courts have the authority to try a case against it for these specific actions.
In addition, the Republic will waive its right to claim immunity for any lawsuits brought by
investors in courts present in New York City or in any appropriate court in Hungary. This waiver
of immunity will be limited. Such a waiver will constitute only a limited and specific waiver for
the purposes of the debt securities and under no circumstances shall it be interpreted as a general
waiver by the Republic or a waiver with respect to proceedings unrelated to the debt securities.
Further, the Republic will not agree to waive its right to immunity with regard to:
actions brought against the Republic under U.S. federal securities laws or any state
securities laws;
•
present or future “premises of the mission” as defined in the Vienna Convention
on Diplomatic Relations signed in 1961;
•
“consular premises” as defined in the Vienna Convention on Consular Relations signed in 1963;
•
any other property or assets used solely or mainly for official state purposes in the Republic or elsewhere; and/or
•
military property or military assets or property or assets of the Republic related thereto.
Thus, the Republic may assert immunity to such actions. Investors may have a difficult time
making any claims based upon such securities laws or enforcing judgments against the property
described above.
In accordance with Regulation (EC) No 593/2008 of the European Parliament and of the Council
of 17 June 2008 relating to contractual obligations (“Rome I”) (which is directly applicable to the
Republic), in the case of contractual obligations in civil and commercial matters which fall under
the scope of Rome I, Hungarian law recognizes that contracting parties may freely agree on a choice
of foreign law whether or not it is the law of a Member State of the EU. In the case of contractual
obligations which fall beyond the scope of Rome I, under Law-Decree No. 13 of 1979 on International
Private Law of the Republic of Hungary, the parties may freely agree on a choice of a non-Hungarian
jurisdiction and of foreign law in commercial matters provided that there is a substantial foreign
element in their legal relationship. The agreed upon courts have exclusive jurisdiction, unless
otherwise provided by the parties.
In accordance with Regulation (EC) No 864/2007 of the European Parliament and of the Council
of 11 July 2007 relating to non-contractual obligations (“Rome II”) (which is directly applicable
to the Republic), in the case of non-contractual obligations which fall under the scope of Rome II,
Hungarian law also recognizes that contracting parties may freely agree on a choice of foreign law
to govern non-contractual obligations arising out of or in connection with certain contractual
obligations.
Under Hungarian law, a judgment of a court established in a country other than the Republic of
Hungary may be enforced in the Hungarian courts, if: (i) the jurisdiction of the foreign court is
legitimate under the rules of jurisdiction of Hungarian law; (ii) the decision is final under the
foreign law under which it was made; (iii) there is reciprocity between Hungary and the state of
the foreign court; and that (a) such judgment does not contravene the basic principles of public
policy in the Republic of Hungary; (b) the losing party or its representative had proper or timely
notice of the proceedings; (c) the proceedings in which the judgment was made did not seriously
breach general principles of Hungarian procedural rules; (d) litigation between the same parties
involving the same dispute was not commenced in Hungary prior to the initiation of the foreign
litigation; and (e) Hungarian courts have not already determined the matter (res judicata).
However, Hungarian courts must recognize and enforce judgments of a foreign court chosen by the
parties in a commercial matter (in Hungarian: vagyonjogi határozat) even if there is no reciprocity
between Hungary and the state of the foreign court, provided that the choice of forum by the
parties is valid under the above-mentioned decree.
Following the Republic’s accession to the EU on May 1, 2004, Council Regulation 2001/44/EC on
jurisdiction and the recognition and enforcement of judgments in civil and commercial matters
applies to judgments and their enforcement by and of courts in the Member States of the EU.
You should note that Hungary is a party to the New York Treaty on the Recognition and the
Enforcement of Arbitration Awards, dated June 10, 1958, and therefore the recognition and
enforcement of the arbitration awards obtained by a holder of a debt security in a country being a
party to such treaty is possible in Hungary, provided that such forum has been chosen. No award
will be recognized and enforced however, if the provisions therein are contrary to Hungarian public
policy.
Due to the above rules on enforcement, even if a U.S. court were to rule in an investor’s
favor, such an investor may have in certain cases a difficult time collecting such amount in
Hungary, the location of most of the Republic’s assets.
USE OF PROCEEDS
Unless otherwise indicated in the relevant prospectus supplement, the net proceeds from each sale
of debt securities will be used for general financing purposes. The Republic may also issue
securities in exchange for any of its outstanding securities.
This is a brief summary of the terms and conditions of the debt securities and the related
fiscal agency agreement. Copies of the debt securities and the fiscal agency agreement forms,
which may differ from one series of debt securities to another, will be filed as exhibits to the
registration statement that includes this prospectus. You should not assume this summary is
complete and should rely primarily on the information found in the exhibits. Each time the
Republic sells securities, the Republic will provide a prospectus supplement that will contain
specific information about the terms of that offering. The prospectus supplement may also add,
update or change information contained in this prospectus. If the information in this prospectus
differs from any subsequent prospectus supplement, you should rely on the updated information in
the prospectus supplement.
General
The Republic will issue the debt securities under a fiscal agency agreement between the
Republic and a selected fiscal agent.
The Republic may issue the debt securities in one series or more, as it may authorize from
time to time. The prospectus supplement for each such series will contain the following
information:
•
designation, aggregate principal amount, any limitation on the aggregate
principal amount, currency of denomination and payment, and authorized denominations;
•
price of the securities, expressed as a percentage of the principal amount at which the debt securities will be issued;
•
level and method of determining any interest rate(s);
•
any dates of interest rate payments and dates from which interest will accrue;
•
any index, price or formula used to set the amount of any payment of principal, premium or interest;
•
places where the principal, any premium and any interest will be payable;
•
the record dates, if any, for the determination of holders of debt securities to
whom any interest or principal is payable;
•
any optional or mandatory redemption terms, or repurchase or sinking fund
provisions;
•
whether the debt securities will be in bearer form and include any interest
coupons, or in registered form, or both bearer and registered form, as well as
restrictions on the exchange of one form for another and on the offer, sale and delivery
of debt securities in bearer form; and
•
other specific information as needed.
Any debt securities offered by the Republic that are exchangeable for other debt securities or
for shares, bonds or other obligations or securities of the Republic or any other person or body
corporate formed or to be formed by the Republic will be described in the prospectus supplement
relating to such debt securities.
The prospectus supplement for a given issue of debt securities will also provide information
on the principal United States federal income and other tax consequences, if any, applicable to
such debt securities.
If applicable, the prospectus supplement may also describe any Republic income tax
consequences and special considerations applicable to that particular series of debt securities.
The Republic may issue the debt securities as discounted securities which either bear no
interest or bear interest at a rate below market rates at the time of issue. These discounted debt
securities may be sold at a substantial discount below the stated principal amount.
The debt securities will be direct, unconditional, unsecured and general obligations of the
Republic. Except as explained under the heading “Negative Pledge” below, the debt securities will
rank at least equally in right of payment with all other unsecured and unsubordinated obligations
of the Republic on or after the date the debt securities are issued, except for such obligations as
may be preferred by mandatory provisions of applicable law. The debt securities will be backed by
the full faith and credit of the Republic. The Republic will give no preference to one obligation
over another on the basis of priority of issue date or currency of payment.
Payment
Unless otherwise specified in the applicable prospectus supplement, principal at maturity of a
debt security will be payable at the office of the fiscal agent upon surrender of the debt
security, and interest will be paid by check mailed to the registered holders of the debt
securities. A registered holder of a debt security of a series, the aggregate principal amount of
which equals or exceeds $1,000,000, may elect in writing to have interest paid to it by wire
transfer in same-day funds to a bank account maintained by the holder in the United States.
Notwithstanding anything above to the contrary, if the debt securities are to be issued in the form
of global securities (as discussed below) payment of the principal of and interest on any such
global debt securities will be made in accordance with the regular procedures established by the
depository for those global debt securities.
If any date on which principal or interest or additional amounts is due to be paid is not a
business day for the fiscal agent, the Republic may pay such principal or interest on the next
succeeding business day and no interest shall accrue for such intervening period, provided however
that if that next succeeding business day falls in the next calendar month, such payment of
principal or interest will be payable on the first preceding business day. For this purpose,
business day means a day on which commercial banks and foreign exchange markets are open for
business and settle payments both in London and New York.
Any moneys held by the fiscal agent in respect of debt securities and remaining unclaimed for
two years after those amounts have become due and payable shall be returned to the Republic, as
provided and in the manner set forth in the debt securities. After the return of these moneys to
the Republic, the holders of these debt securities may look only to the Republic for any payment.
Claims for payment of the principal amount of the debt securities shall become void ten years
after such principal amount became due and payable. Claims for payment of interest on the debt
securities shall become void five years after the relevant interest payment date on which the
interest became due and payable.
Negative Pledge
As long as any debt security remains outstanding, the Republic will not allow any Security
Interest to be established on any of the Republic’s or the National Bank of Hungary’s (“NBH”)
assets or revenues, present or future, in order to secure (i) any Public External Indebtedness of
the Republic having an original maturity of at least one year, or (ii) any Public External
Indebtedness of the NBH having an original maturity of at least one year and incurred on or prior
to December 31, 1998, unless the debt securities are secured equally and ratably to this external
indebtedness.
For these purposes:
“External Indebtedness” means any obligation in respect of existing or future Indebtedness
denominated or payable, or at the option of the holder thereof payable, in a currency other than
the lawful currency of the Republic of Hungary. If at any time the lawful currency of the Republic
of Hungary becomes the Euro, then External Indebtedness shall also include Indebtedness expressed
in or payable or optionally payable in Euro, if (i) such Indebtedness was issued after the date on
which the Euro became the lawful currency of the Republic of Hungary, and (ii) more than 50% of the
aggregate principal amount of such Indebtedness was initially placed outside the Republic of
Hungary.
“Public External Indebtedness” means External Indebtedness which: (i) is in the form of, or
represented by, bonds, notes or other similar securities, and (ii) is, or may be, quoted, listed or
ordinarily purchased and sold on any stock exchange, automated trading system or over-the-counter
or other securities market.
“Indebtedness” means any indebtedness of any Person (whether incurred as principal or surety)
for money borrowed.
“Person” means any individual, company, corporation, firm, partnership, joint venture,
association, organization, state or agency of a state or other entity, whether or not having
separate legal personality.
“Security Interest” means any lien, pledge, hypothecation, mortgage, security interest, charge
or other encumbrance or arrangement which has a similar legal and economic effect, and, without
limitation, anything analogous to any of the foregoing under the laws of any jurisdiction.
Governing Law
The debt securities will be governed by the laws of the State of New York, without regard to
the conflicts of law principles of the State of New York (other than Section 5-1401 of the General
Obligation Law of the State of New York), except for the Republic’s authorization and execution
procedures and any other matters that must be governed by the laws of the Republic. The Republic
will submit to the jurisdiction of any state or federal court in New York City for lawsuits brought
by investors on the debt securities. Investors may also bring actions against the Republic in the
appropriate Hungarian courts. The Republic will appoint the Consulate General of the Republic of
Hungary in New York at 223 East 52nd Street, New York, New York, 10022, as its
authorized agent to receive any process that may be served in an action brought by an investor.
Fiscal Agent
The fiscal agency agreement will govern the duties of the fiscal agent appointed by the
Republic for each series of debt securities. The fiscal agent chosen for each series may not
always be the same agent. The Republic may also maintain deposit accounts and conduct other banking
transactions in the ordinary course of business with the fiscal agent.
Please note that the fiscal agent is an agent of the Republic, not a trustee for the holders
of the debt securities, and does not have the responsibility or duty to act for the holders as a
trustee.
Payment of Additional Amounts
All payments made in respect of a debt security, including payments of principal and interest,
to a holder of a debt security that is not a resident of the Republic, will be made by the Republic
without withholding or deducting for or on account of present or future taxes, duties, levies or
other governmental charges of whatever nature imposed or levied by the Republic or any political
subdivision or taxing authority within the Republic (“Taxes”). In the event the Republic is
required by law to deduct or withhold any such Taxes from payments, the Republic will pay such
additional amounts as may be necessary so that the net amount received is equal to the amount
provided for in the debt security to be paid in the absence of such deduction or withholding. A
holder will not be paid any additional amounts, however, if the Tax is:
•
a Tax that would not have been imposed but for the holder’s present or former
connection (or a connection of the holder’s fiduciary, shareholder or other related
party) with the Republic, including being or having been a citizen or resident of the
Republic or being or having been engaged in a trade or business or present in the
Republic or having, or having had, a permanent establishment in the Republic;
•
imposed on a payment to an individual and is required to be made pursuant to the
European Council Directive 2003/48/EC on taxation of savings income in the form on
interest payments or any other Directive
implementing the conclusions of the EU Council of Finance Ministers meeting of November
26 and 27, 2000 or any law implementing or complying with, or introduced in order to
conform to, such Directive;
•
imposed because the holder presents a debt security for payment more than thirty
(30) days after the date on which the payment became due and payable;
•
an estate, inheritance, gift, sales, transfer or personal property tax or any
similar tax, assessment or governmental charge;
•
a tax, assessment or other governmental charge which is payable other than by
withholding;
a Tax that would not have been imposed but for the failure to comply with
certification, information or other reporting requirements concerning the holder’s
nationality, residence or identity (or the nationality, residence or identity of the
beneficial owner of the debt security), if the holder’s compliance is required by the
laws of the Republic or of any political subdivision or taxing authority of the Republic
to avoid or reduce such tax;
•
required to be withheld by any paying agent from a payment on the debt security
if such payment can be made without such withholding by another paying agent; or
•
imposed as a result of any combination of the items listed above.
Furthermore, no additional amounts will be paid with respect to any debt security to a holder
who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the
extent that the settlor with respect to such fiduciary, partner or beneficial owner, as the case
may be, would not have been entitled to payment of such additional amounts if they held the debt
security themselves.
Events of Default and Acceleration; Collective Action Securities
The debt securities that the Republic will issue will be collective action securities.
Collective action securities contain provisions regarding acceleration and future modification to
their terms that may differ from those applicable to the Republic’s outstanding securities that are
not designated as collective action securities, as follows:
Event of Default; Event of Acceleration. For each series of debt securities:
•
an “event of default” means any of the following:
•
non-payment — the Republic fails to pay the principal of or interest on
any debt security in the series for more than 30 days after payment is due; or
•
breach of other obligations — the Republic does not perform any of its
other covenants under any debt security in the series for more than 60 days after
the holder of the debt security has given written notice of the breach to the
Republic at the fiscal agent’s corporate trust office;
•
an “event of acceleration” means any of the following:
•
failure to take action — any action, condition or any other thing which
at any time is required to be taken, fulfilled or done in order: (A) to enable the
Republic lawfully to enter into, exercise its rights and perform and comply with its
obligations under and in respect of that series of debt securities, (B) to ensure
that those obligations are legal, valid, binding and enforceable and (C) subject to
their official translation into the Hungarian language, to make the debt securities
admissible in evidence in the courts of the Republic of Hungary, is not taken,
fulfilled or done within 30 days of receipt by the Republic of written notice
thereof; or
•
invalidity — it becomes illegal for the Republic to perform any of its
obligations under the debt securities or if these obligations become invalid and not
remedied by the Republic within 30 days’ written notice thereof.
If an event of default or an event of acceleration occurs, all of the debt securities in the
given series may, by written notice addressed and delivered by the holders of at least 25% of the
aggregate principal amount of the outstanding debt securities in that series to the Republic at the
office of the fiscal agent, be declared to be immediately due and payable, unless prior to such
date the Republic shall have remedied the event of default or event of acceleration for all the
debt securities in that series.
If the fiscal agent receives notice in writing from holders of at least 50% in aggregate
principal amount of the outstanding debt securities in the given series and/or a resolution is
passed at a meeting of the holders of the debt securities in that series, duly convened and held in
accordance with the fiscal agency agreement, to the effect that the event(s) of default and/or
event(s) of acceleration giving rise to a declaration of acceleration made pursuant to the
conditions above is or are cured or is or are waived by them following any such declaration and
that such holders request the fiscal agent to rescind the relevant declaration, the fiscal agent
shall, by notice in
writing to the Republic and the holders, rescind the relevant declaration whereupon it shall
be rescinded and shall have no further effect.
For these purposes, “outstanding debt securities” in a given series does not include those
debt securities in that series (if any) which are for the time being held by any person (including
but not limited to the Republic) for the benefit of the Republic or by any public body owned or
controlled, directly or indirectly, by the Republic.
The Republic is not obliged to provide investors with periodic evidence that there are no
defaults and/or events of acceleration. Please also note that the fiscal agency agreement does not
provide for the holders to be notified of the existence of an event of default or an event of
acceleration or for any right to examine the debt securities register.
Meeting of Holders of Debt Securities; Modification. The fiscal agency agreement contains
provisions for convening meetings of holders of debt securities in a given series to consider
matters relating to the debt securities in that series, including, without limitation, the
modification of any provision of the terms of the debt securities in that series. Any such
modification may be made if, having been approved in writing by the Republic, it is sanctioned by
an Extraordinary Resolution. Such a meeting may be convened by the Republic and shall be convened
by the fiscal agent upon the request in writing of holders holding not less than 10% of the
aggregate principal amount of the outstanding debt securities in the given series. The quorum at
any meeting of holders convened to vote on an Extraordinary Resolution will be two or more persons
holding or representing not less than 50% of the aggregate principal amount of the outstanding debt
securities in the given series or, at any adjourned meeting of holders, two or more persons being
or representing holders, whatever the aggregate principal amount of the outstanding debt securities
held or represented; provided, however, that any proposals relating to a Reserved Matter may only
be sanctioned by an Extraordinary Resolution passed at a meeting of holders at which two or more
persons holding or representing not less than 75% of the aggregate principal amount of the
outstanding debt securities in that series or, at any adjourned meeting, 25% of the aggregate
principal amount of the outstanding debt securities in the given series form a quorum. Any
Extraordinary Resolution duly passed at any such meeting shall be binding on all the holders,
whether present or not.
If a resolution is brought in writing, such a resolution in writing may be contained in one
document or several documents in the same form, each signed by or on behalf of one or more holders.
To participate in a meeting of holders of debt securities, a holder of debt securities must
obtain a proxy or voting certificate from the fiscal agent, as described in the fiscal agency
agreement.
For these purposes:
“Extraordinary Resolution” means:
•
in relation to any Reserved Matter:
•
a resolution passed at a meeting of holders duly convened and held in
accordance with the fiscal agency agreement by a majority consisting of not less
than 75% of the aggregate principal amount of all outstanding debt securities in the
given series; or
•
a resolution in writing signed by or on behalf of holders of not less
than 75% of the aggregate principal amount of all outstanding debt securities in the
given series; and
•
in relation to any other matter:
•
a resolution passed at a meeting of holders duly convened and held in
accordance with the fiscal agency agreement by a majority consisting of not less
than 66.67% of the aggregate principal amount of the outstanding debt securities in
the given series which are represented at that meeting; or
•
a resolution in writing signed by or on behalf of holders of not less
than 66.67% of the aggregate principal amount of all outstanding debt securities in
the given series.
change any date, or the method of determining the date, fixed for payment of
principal or interest in respect of the debt securities in the given series, to reduce
the amount of principal or interest payable on any date in respect of the debt
securities in that series or to alter the method of calculating the amount of any
payment in respect of the debt securities in that series on redemption or maturity or
the date for any such payment;
•
effect the exchange or substitution of the debt securities in the given series
for, or the conversion of the debt securities in that series into, shares, bonds or
other obligations or securities of the Republic or any other person or body corporate
formed or to be formed;
•
reduce or cancel the principal amount of the debt securities in the given series;
•
vary the currency or place of payment in which any payment in respect of the debt
securities in the given series is to be made;
•
amend the status of debt securities in the given series;
•
amend the obligation of the Republic to pay additional amounts;
•
amend the events of default or the events of acceleration;
•
amend the law governing the debt securities in the given series, the courts to
the jurisdiction to which the Republic has submitted in the debt securities in that
series, the Republic’s obligation to maintain an agent for service of process in the
United States or the Republic’s waiver of immunity, in respect of actions or proceedings
brought by any holder of the debt securities in that series;
•
modify the provisions contained in the fiscal agency agreement concerning the
quorum required at any meeting of the holders of the debt securities in the given series
or any adjournment thereof or concerning the majority required to pass an Extraordinary
Resolution or the percentage of votes required for the taking of any action;
•
change the definition of “Extraordinary Resolution” or “outstanding” in the
conditions of the debt securities in the given series and/or fiscal agency agreement;
•
instruct any holder or committee appointed on behalf of all holders of the debt
securities in the given series to withdraw, settle or compromise any proceeding or claim
being asserted pursuant to the relevant condition of the debt securities in that series;
•
confer upon any committee appointed any powers or discretions which the holders
of the debt securities in the given series could themselves exercise by Extraordinary
Resolution; or
•
amend the definition of Reserved Matter.
For these purposes, “outstanding debt securities” in a given series does not include those
debt securities in that series (if any) which are for the time being held by any person (including
but not limited to the Republic) for the benefit of the Republic or by any public body owned or
controlled, directly or indirectly, by the Republic.
The Republic and the fiscal agent may, without the vote or consent of any holder of debt
securities of a series, amend the fiscal agency agreement for the purposes of:
•
curing any ambiguity, or of curing, correcting or supplementing any defective
provision contained in the fiscal agency agreement; or
•
amending the fiscal agency agreement in any manner as the Republic or the fiscal
agent may deem necessary or desirable, which is not inconsistent with the debt
securities of that series and, as solely determined by the Republic, does not adversely
affect the interests of any holder of debt securities of that series.
Representative Committee. The holders of the debt securities in a series may, by a resolution
passed at a meeting of holders duly convened and held in accordance with the fiscal agency
agreement by a majority of at least 50% in aggregate principal amount of the debt securities in
that series then outstanding, or by notice in writing to the fiscal agent signed by or on behalf of
the holders of at least 50% in aggregate principal amount of the debt securities in that series
then outstanding, appoint any persons as a committee to represent the interests of the holders if
any of the following events shall have occurred:
•
an event of default or an event of acceleration;
•
any event or circumstance which would, with the giving of notice, lapse of time,
the issuing of a certificate and/or fulfillment of any other requirement provided for
become an event of default or an event of acceleration; or
•
any public announcement by the Republic, to the effect that the Republic is
seeking or intends to seek a restructuring of that series of debt securities (whether by
amendment, exchange offer or otherwise).
Such committee in its discretion may, among other things, (i) engage legal advisers and
financial advisers to assist it in representing the interests of the holders, (ii) adopt such rules
as it considers appropriate regarding its proceedings and (iii) enter into discussions with the
Republic and/or other creditors of the Republic.
Further Issues of Debt Securities of a Series
The Republic may from time to time, without the consent of holders of the debt securities of
any series, create and issue additional debt securities with the same terms and conditions as those
of the debt securities of that series even if such additional debt securities have original issue
discount for U.S. federal income tax purposes and even if doing so may adversely affect the value
of the debt securities of that series. Such additional debt securities, together with the debt
securities of that series, will constitute a single series of debt securities under the fiscal
agency agreement.
Global Securities
If specified in a prospectus supplement, the Republic will issue the debt securities as one or
more fully registered global securities to be deposited with or on behalf of The Depository Trust
Company, New York, New York (“DTC”), its nominee and/or one or more depositories named in the
prospectus supplement, such as the Euroclear Bank S.A./N.V., as operator of the Euroclear System
(“Euroclear”) and Clearstream Banking, S.A., Luxembourg (“Clearstream, Luxembourg”).
DTC is a limited-purpose trust company organized under the laws of the State of New York, a
member of the U.S. Federal Reserve System, a “clearing corporation” as defined by the New York
Uniform Commercial Code and a “clearing agency” registered under the provisions of Section 17A of
the Securities Exchange Act of 1934. DTC holds securities of its participants and facilitates
clearance and settlement of securities transactions through electronic book-entry changes in its
participants’ accounts. This eliminates the need to exchange certificates. DTC’s participants
include securities brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. DTC’s book-entry system is also used by other organizations such as
securities brokers and dealers, banks and trust companies that work through a participant. The
rules that apply to DTC are on file with the SEC and the DTC agrees and represents to its
participants that it will administer its book-entry system accordingly.
The issuance of global securities by the Republic means the Republic will not issue
certificates to each holder. A global security will be registered in the name of the related
depository or its nominee, who will keep computerized records of its participants (such as the
holder’s broker) whose clients have purchased the debt securities. The participant will keep a
record of its clients who purchased the debt securities. Except as explained below or in an
applicable prospectus supplement, a global security may be transferred only in whole and only to
the appropriate depository or its nominee.
While the relevant prospectus supplement will describe the specific terms of the depository
arrangement for any portion of a series of debt securities represented by a global security, the
Republic anticipates that the following provisions will apply to all depository arrangements.
After a global security is issued, the Republic expects that the depository or nominee will
credit on its electronic system the principal amounts of the debt securities represented by the
global security to the accounts of its “participants,” i.e., institutions that have accounts with
the depository or nominee. Only participants or persons that may hold interests through
participants may own
beneficial interests in a global security. These beneficial interests will be shown on, and
transfers of global securities will be made only through the records maintained by the depository
and its participants. Please note that laws in certain states require that purchasers must acquire
securities in physical form (i.e., certificates). Such limitations may prevent certain investors
from owning, transferring or pledging a beneficial interest in a global security.
The Republic will provide the fiscal agent with payment of principal, any premium or interest
due on the debt securities on an interest payment date or at maturity on that day. As soon as
possible thereafter, the fiscal agent will make such payments to the depository or nominee that is
the registered owner of the global security representing the particular debt securities according
to arrangements made between the fiscal agent and the depository. The Republic will treat the
depository or its nominee as the owner for all purposes. Therefore, neither the Republic nor the
fiscal agent will have any direct responsibility or liability for payments made on account of
beneficial ownership interests of a global security or for maintaining or reviewing the related
records.
After receiving payment of any principal or interest, the depository will credit the accounts
of the participants on the payment dates according to their respective holdings of beneficial
interests in the global securities as shown in the relevant records. Payments by participants to
owners of beneficial interests in the global securities will be governed by the customary practices
between the participants and owners of beneficial interests in “street name.” However, payments
will be the responsibility of the participants and not of the depository or the Republic.
As long as a depository or nominee is the registered owner of a global security, it will
continue to be considered the sole owner and holder of the debt securities represented by the
global security. Except for cases outlined in this section or in a prospectus supplement, owners
of beneficial interests in a global security:
•
may not have the debt securities represented by the global security registered in
their names;
•
will not receive or be entitled to receive debt securities in certificate form
through exchange or some other manner; and
•
will not be considered the owners or holders of any debt securities represented
by a given global security.
Accordingly, investors owning a beneficial interest in a global security must rely on
participants of the depository to exercise any of their rights under the debt securities.
Participants must in turn rely upon the procedures of the depository. Under current industry
practice, if the owner of a beneficial interest desired to take any action that the depository or
its nominee would have the right to take as the holder of the global security, the depository would
authorize the participant to take such an action and the participants would then authorize
beneficial owners to do the same or would otherwise follow the instructions of the owner of the
beneficial interest.
Unless stated otherwise in a prospectus supplement, no global security may be transferred,
except in whole and not in part, and only by the related depository to a nominee of such depository
or by a nominee of such depository to such depository or any other nominee of such depository
Notwithstanding the foregoing, under the following conditions, debt securities represented by
a global security may be exchanged for debt securities in certificate form in denominations
specified in the applicable prospectus supplement:
•
if the depository or each of Euroclear and Clearstream, Luxembourg notifies the
Republic that it is unwilling or unable to continue as depository or if the depository
ceases to be a clearing agency registered under applicable law and a replacement
depository is not appointed;
•
the Republic decides not to have all of the debt securities of the series
represented by the global security;
•
if there is a continuing actual or potential event of default that would allow
the holders of the related debt securities to declare their principal and interest
immediately due and payable; or
•
in such other events as may be specified in a prospectus supplement.
Any debt security that is exchangeable under the above conditions may be exchanged for debt
securities in certificate form registered in the names specified by the depository. Debt
securities that have been exchanged may be presented for registration of transfer or exchange at
the office of the fiscal agent in London or Luxembourg. Subject to the above, a global security is
not
exchangeable, except for a global security or global securities of the same aggregate
denominations to be registered in the name of the depository or its nominee.
PLAN OF DISTRIBUTION
This summary plan of distribution will be supplemented by a description of the particular
offering and its terms and conditions in a prospectus supplement issued for each series of the debt
securities. Each such prospectus supplement will include the following information:
•
names and addresses of any underwriters or agents;
•
price of the debt securities;
•
net proceeds received by the Republic from the sale of the debt securities;
•
discounts or other compensation to the underwriters;
•
discounts or concessions made to dealers;
•
security exchanges on which the debt securities may be listed.
The Republic may sell the debt securities:
•
through underwriters or dealers;
•
directly to one or more institutional purchasers; or
•
through agents.
By Underwriters
If underwriters are used in the sale, the debt securities will be acquired by the underwriters
for their own account. The underwriters may resell the debt securities from time to time in one or
more transactions, including negotiated transactions, either at a fixed public offering price or at
varying prices set at the time of sale. The debt securities may be offered to the public either
through underwriting syndicates represented by the managing underwriters or directly from syndicate
members or designated dealers. Unless the applicable prospectus supplement states otherwise,
certain conditions must be met before the underwriters will be obliged to purchase the debt
securities and, once any debt securities are purchased, the underwriters must then purchase all of
the debt securities offered in the prospectus supplement. Any initial public offering price and
discounts or concessions made to dealers may be changed from time to time.
Direct Sales
The Republic may sell the debt securities directly to one or more institutional investors. In
this case, no underwriters or agents would be involved.
By Agents
The Republic may sell the debt securities through agents. In this case, the prospectus
supplement will give the name of the agents involved in the offer and sale of the debt securities
and the commission the Republic will pay for the agent’s services. Unless the prospectus
supplement indicates otherwise, the agent will use its best efforts to solicit purchases during the
time of its appointment.
A prospectus supplement may also indicate that the Republic will authorize agents, dealers or
underwriters to solicit offers from specified institutions to purchase the debt securities. These
institutions would purchase the debt securities at the public offering price given in the
prospectus supplement, plus accrued interest, on the basis of delayed delivery contracts providing
for payment and
delivery on one or more specified dates in the future. These contracts will be subject only
to the conditions given in the prospectus supplement, which would also contain the commission
payable for solicitation.
The Republic may have agreements with underwriters, dealers and agents to indemnify them
against certain civil liabilities, including liabilities under the United States Securities Act of
1933, or to contribute to any payments that the underwriters, dealers or agents may be required to
make. Underwriters and agents may also engage in transactions with or perform services for the
Republic in the ordinary course of their business.
Each series of the debt securities will be a new issue of the debt securities with no
established trading markets. Underwriters, dealers and agents may, but need not, make a market in
the debt securities and may discontinue market making at any time without notice. Neither the
Republic nor any underwriters, dealers or agents can give any assurance as to the liquidity of the
trading market for the debt securities.
VALIDITY OF THE SECURITIES
Certain legal matters with respect to the debt securities to be offered will be passed upon on
behalf of the Republic by the special Hungarian counsel for the Republic to be named in a
relevant prospectus supplement, and by the special United States counsel for the Republic to be
named in a relevant prospectus supplement, and, if sold to or through underwriters, will be passed
upon for such underwriters by their United States counsel to be named in the prospectus or
prospectus supplements thereto. All statements in this prospectus with respect to matters of the
law of Hungary have been passed upon by Dr. Zsolt Szita Law Office, Hungarian counsel to the
Government Debt Management Agency Private Company Limited by Shares. In rendering its opinion,
United States counsel will rely as to all matters of the law of Hungary upon the opinion of Dr.
Zsolt Szita Law Office.
AUTHORIZED AGENT IN THE UNITED STATES
The authorized agent of the Republic in the United States is the Consulate General of the
Republic of Hungary in New York at 223 East 52nd Street, New York, NY10022.
OFFICIAL STATEMENTS AND DOCUMENTS
The information set forth herein and in the documents incorporated by reference relating to the Republic has been reviewed by Dr. György Matolcsy in his official capacity as the Minister of National
Economy, being the Minister responsible for Public Finances, and is included herein on his
authority.
The information for which the NBH has been cited as the source was provided by the NBH. The
information for which the Ministry of National Economy is cited as the source was provided by the
Ministry of National Economy of the Republic. The information for which the Government Debt
Management Agency Private Company Limited by Shares is cited as the source was provided by the
Government Debt Management Agency Private Company Limited by Shares.
You should rely only on the information contained or incorporated by reference in this
prospectus. We have not authorized anyone to provide you with information that is different from
what is contained in this prospectus. You should not assume that the information contained in this
prospectus is accurate as of any date other than the date of this prospectus. This prospectus is
not an offer to sell or a solicitation of an offer to buy any of our debt securities in any
jurisdiction in which such offer or solicitation would be unlawful.
It is estimated that the expenses of the Republic in connection with the sale of Debt
Securities hereunder will be as follows:
$
Registration fee
356,500
**
FINRA fee
*
Blue sky fees and expenses
*
Printing expenses
*
Fiscal Agent fees and expenses
*
Miscellaneous expenses, including legal fees and reimbursements
of expenses of the underwriters
*
Total
*
Note:—
*
To be filed concurrently with the appropriate prospectus supplement, either in an amendment
to the Republic’s Annual Report on Form 18-K or in a post-effective amendment to this
Registration Statement.
**
This Registration Statement and the Prospectus included herein relate to $5,000,000,000
aggregate principal amount of debt securities, of which $500,000,000 aggregate principal
amount of debt securities has been previously registered under the Registrant’s Registration
Statement No. 333-131950 filed on February 21, 2006. $53,500 of the total registration fee
paid by the Registrant with Registration Statement No. 333-131950 and calculated in accordance
with the fees then in effect (which relates to $500,000,000 aggregate principal amount of debt
securities) has been applied to the registration fee to be paid with this Registration
Statement pursuant to Rule 457 under the Securities Act of 1933. The remaining fee of $303,000
(calculated in accordance with the fees currently in effect) is being paid herewith for an
aggregate principal amount of $4,500,000,000 of additional debt securities to be registered
hereunder.
Item 13. Copy of Agreements with Underwriters
Filed as an exhibit to this Registration Statement.
Item 14. Agreement to Provide Legal Opinions
The Republic hereby agrees to furnish the opinions of the special Hungarian counsel for the
Republic as to the legality of each issue of securities in post-effective amendments to this
Registration Statement, in each case together with a translation, where necessary, into the English
language.
UNDERTAKINGS
The Republic hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment
to this Registration Statement:
(i)
to include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii)
to reflect in the prospectus any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment thereto) which, individually or
in the aggregate, represent a fundamental change in the information set forth in the Registration
Statement (notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the
estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective registration
statement); and
(iii)
to include any material information with respect to the Plan of Distribution not previously
disclosed in the Registration Statement or any material change to such information in the
Registration Statement;
provided, however, that the Registrant shall not be required to file a post-effective
amendment otherwise required by clause (i), (ii) or (iii) if the information required to be
included in a post-effective amendment is contained in any report filed under the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration Statement, or is
contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this
Registration Statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3)
That, for purposes of determining any liability under the Securities Act of 1933, each filing
of the Registrant’s annual report on Form 18-K or of amendments thereto under the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered thereby, and the
offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(4)
To remove from registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.
Pursuant to the requirements of the Securities Act of 1933, as amended, the Republic of
Hungary has duly caused this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Budapest, Hungary on the
2nd day of December, 2010.
THE REPUBLIC OF HUNGARY,
Acting by and through its Minister of National
Economy, being the Minister Responsible for Public
Finances
Consent is hereby given to the use of his name in connection with the information specified
in this registration statement or amendment to have been supplied by him and stated on his
authority.
Pursuant to the requirements of the Securities Act of 1933, as amended, the undersigned, the
duly authorized representative of the Republic of Hungary in the United States, has signed this
Registration Statement in the city of New York, New York, on the 2nd day of December, 2010.