ÁKK plans big net forint issues in first quarter

Debt

Hungaryʼs Government Debt Management Agency (ÁKK) plans net forint securities issues of HUF 613 bln, nearly two-third of it in discount T-bills, in the first quarter of 2016 according to its January-March issue plan.

Gross net issues may reflect the usual year-start need to refill government accounts depleted late in the year and also the stated intention to pay most maturing FX denominated debt in forints.

FX maturities in the first quarter include a GBP 500m bond.

Gross issues are planned at HUF 1,833 bln and gross redemptions at HUF 1,226 bln in the first three months.

Big net issues are usual at the start of the year to fill government unified accounts after the debt manager limited issuance before the end of the year to keep Maastricht state debt on a falling trend.

In line with the above practice, ÁKK plans to hold just one reverse auction – buying back bonds ahead of maturity –, to a limited HUF 15 bln, on March 30.

ÁKK plans to offer HUF 40 bln of both three-month and twelve-month discount T-bills per auction in the first quarter after having reduced its per-auction offers to HUF 15 bln-20 bln and to HUF 20 bln, respectively, since September.

Three-month discount T-bill expiries will total HUF 211 bln against issues of HUF 520 bln in January-March. There will be one big twelve-month expiry, of HUF 150 bln on February 17, against combined issues of HUF 240 bln in the three months.

The sale of interest-bearing T-bills, designed for the general public, will match the HUF 419 bln in such bills expiring, in the usual technical assumption.

The debt manager plans gross bond issues of HUF 635 bln in January-March, including HUF 120 bln of long-term bonds issued against shorter ones at the periodʼs six switch auctions.

The switches are also part of the HUF 427 bln bond expiries in the three-month period. Expiries include HUF 15 bln of bonds bought back early at the seven reverse auction in the period. There will be one major bond expiry, of HUF 282 bln of 2016/C bonds on February 12 in the three months.

Floater auctions will continue to alternate weekly with the auction of fixed-rate bonds at the 13 bond auctions in the period.

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