ÁKK plans net issues of bonds, 3-month discount T-bills in Feb-Apr

Three-month T-bill per-auction offers are planned at HUF 50 bln and 12-month T-bill offers at HUF 45 bln, both scaled back after a rise to HUF 60 bln since the end of last December. And ÁKK plans to restart the early buy back of bonds at reverse auctions from April 1, also indicating that the need to replenish the State Treasury's deposits is far less pressing this year than it was at the beginning of last year.

The easier budget position is also suggested by the fact that ÁKK did not offer "liquidity bills" — short-term, usually six-week bills offered on a case-by-case basis to manage the government's liquidity needs — this week after holding such auctions and accepting oversubscription at the previous two weeks of January. ÁKK also raised three-month T-bill sales at the year's first two auctions but sold just the planned volume despite continued large demand at the third such auction on Tuesday.

Three-month discount T-bill expiries will total HUF 510 bln against issues of HUF 650 bln in the period and there will be one big twelve-month expiry, of HUF 330 bln on April 1 against combined issues of HUF 270 bln in the three months.

The sale of interest-bearing T-bills, designed for the general public, in a technical assumption, will match the HUF 327 bln such bils expiring in February-April.

The debt manager plans gross bond issues of HUF 685 bln in February-April, including HUF 100 bln bonds issued against shorter bonds at the period's five switch auctions.

Floater auctions will continue to alternate weekly with the auction of fixed-rate bonds, and ÁKK plans to sell on average HUF 45 bln bonds per week at the 13 bond auctions in the period.

Bond expiries will total HUF 504 bln, including one big bond expiry, of HUF 343 bln of 2015/A bonds on February 12. The planned buybacks, of HUF 60 bln are timed at the three reverse auctions due bi-weekly in April.

ÁKK reduced issues and early buybacks in the last few months of 2014, similar to the previous year, in order to keep gross state debt in terms of GDP on a falling trend, as required by the law. Government deposits with the National Bank of Hungary fell HUF 285 bln in a month to HUF 988 bln, their lowest 2014 level at the end of December, but the fall was relatively mild compared to a 54% fall to HUF 752 bln, the lowest level recorded since the autumn of 2008, at the end of 2013. Last year it took ÁKK several months to replenish the deposits, through raised 3-month issues and regular issues of liquidity bills.