ÁKK sells HUF 14.5 bln of bonds at switch auction, below plan

Debt

The Government Debt Management Agency (ÁKK) sold HUF 14.5 billion of bonds maturing in 2024 and 2026, accepting bonds expiring in 2020 as payment, at a switch auction on Wednesday.   

The ÁKK sold HUF 8 bln of 2024/B bonds for 2020/A bonds, HUF 12 bln less than it originally offered, after bids reached only HUF 15.9 bln. The five-year bonds sold at an average yield of 2.75% at the switch auction.

The ÁKK also sold HUF 6.5 bln of 2026/D bonds for 2020/A bonds, down from its original offer of HUF 20 bln. Demand from primary dealers came to HUF 13.1 bln for the exchange. The bonds sold at an average yield of 3.48%.

The ÁKK accepted the 2020/A bonds as payment at a fixed yield of 1.22%.

Demand for 2026 bonds dropped and yields rose from the previous switch auction on August 22, when the ÁKK sold HUF 20 bln of the bonds at an average 3.27% yield. It also sold HUF 19 bln of 2028 bonds at an average yield of 3.40% on August 22.  

The debt manager last sold 2024/B bonds at a switch auction on June 27 at an average yield of 2.72%.

Of the closest secondary market benchmarks, the five-year benchmark calculated on 2024/C bonds was 2.89%, while the ten-year benchmark calculated on 2027/A bonds was 3.50% on Tuesday.

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