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ÁKK sells HUF 37 bln of bonds at switch auction, below plan

The Government Debt Management Agency (ÁKK) sold a combined HUF 37 billion of bonds maturing in 2025 and 2026 for ones expiring in 2019 at a switch auction on Wednesday, according to state news wire MTI.  

The ÁKK sold HUF 18.5 bln of 2025/B bonds, accepting 2019/A bonds as payment. The ÁKK also sold HUF 18.5 bln of 2026/D bonds for 2019/C bonds. 

The scale of the sales was below the original offer, as the ÁKK had offered to sell HUF 20 bln of 2025/B bonds and HUF 30 bln of 2026/D bonds.   

Demand from primary dealers for the 2025/B bonds came to HUF 23.47 bln, while demand for the 2026/D bonds was HUF 45.10 bln.

The 2025 bonds sold at an average yield of 2.78% at the exchange, while the 2026 bondsʼ average yield came to 2.97% at the switch auction. The average yield of the 2019/A bonds was 0.21% and the yield of the 2019/C bonds was 0.32%.   

Of the closest secondary market benchmarks, the ten-year benchmark calculated on 2027/A bonds was 3.06%, the five-year benchmark calculated on 2022/B bonds was 1.86%, and the three-year benchmark calculated on 2020/C bonds was 0.89%.