ÁKK plans net issues from discount T-bills in Dec-Feb

Debt

Hungary's Government Debt Management Agency (ÁKK) plans net forint securities issues of HUF 262 bln in December-February, practically all from discount T-bills. Nearly all of the HUF 505 bln gross bond issues will finance redemptions, the three-month forint financing plan on ÁKK's website shows.

Gross bond expiries will total HUF 498 bln bond, including HUF 361 bln in 2015/A bonds maturing on February 12, HUF 17 bln in 2014/B bonds due on December 22 and a HUF 835m repayment on 2016/A bonds due on December 31.

Bond buybacks at reverse auctions will be scaled back from a planned HUF 187 bln in Q4 to a more usual level of HUF 60 bln in the three months ahead, and switch auction volumes will also be reduced to HUF 60 bln from a planned HUF 107 bln in the last quarter.

ÁKK had raised the bond buybacks in a bid to reduce year-end government debt.

Excluding the switch auctions, ÁKK plans to sell on average slightly more than HUF 40 bln bonds instead of the planned Q4 average of HUF 52 bln per auction at the eleven fixed- and floating rate auctions to be held in the period.

The debt manager plans net HUF 255 bln discount T-bill issues in the three months.

Three-month discount T-bill sales are planned to total HUF 660 bln at 13 auctions against expiries of HUF 520 bln.

Twelve-month discount T-bill sales will exceed the HUF 225 bln expiries by HUF 115 bln according to the three-month plan.

The three-month issues translate to more than HUF 50 bln sale per auction and the twelve-month plan to more than HUF 48 bln. Both are up from the recent offers of HUF 30 bln.

ÁKK cut its discount T-bill auction offers at the end of October, and did not except occassional high subscriptions, most likely limiting issues to the necessary minimum as the year end nears.

ÁKK also cut its fixed-rate auction offer by about HUF 5 bln to HUF 50 bln-HUF55 bln and has offered HUF 10 bln-HUF15 bln of floating-rate bonds rather than HUF 20 bln since the middle or end of October. In the case of bonds, however, it raised the sales on big oversubscription.

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