ÁKK sells HUF 40 bln of bonds at switch auction, below plan

Debt

The Government Debt Management Agency (ÁKK) sold a combined HUF 40 bln of bonds maturing in 2021 and 2024 for ones expiring in 2018 and 2019 at a switch auction on Wednesday.

The ÁKK sold HUF 20 bln of 2021/A floating-rate bonds, accepting 2018/D bonds as payment. The ÁKK also sold HUF 20 bln of 2024/B bonds for 2019/C bonds. It had offered to sell HUF 20 bln of bonds in both cases.

Demand by primary dealers for the floating-rate 2021/A bonds came to HUF 40.7 bln. Demand for the 2024/B bonds was HUF 45.7 bln.

The 2024 bonds had an average yield of 2.84% at the switch auction.

The average yield at which the 2018/D bonds will be calculated during the exchange will be based on the 3-month interbank offered rate as published by the National Bank of Hungary (MNB) on April 19. The yield of the 2019/C bonds calculated as payment was fixed at 0.40%.

Of the closest secondary market benchmarks, the ten-year benchmark calculated on 2027/A bonds was 3.27%, the five-year benchmark calculated on 2022/B bonds was 2.06%, and the three-year benchmark calculated on 2020/C bonds was 1.05% on Tuesday.

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