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ÁKK buys back HUF 12.8 bln of bonds at reverse auction

Debt

The Government Debt Management Agency (ÁKK) bought back a combined HUF 12.80 billion of bonds expiring in 2019 before maturity at a reverse auction on Wednesday, Hungarian news wire MTI reported.

The ÁKK bought back HUF 2.41 bln of 2019/A bonds, which mature on June 24, 2019. Bids reached HUF 37.21 bln, and the average repurchase yield was 0.33%.

The ÁKK also bought back HUF 10.39 bln of 2019/B floating-rate bonds maturing on May 20, 2019. Bids reached HUF 94.52 bln. The repurchase yield compared to a 12-month secondary market benchmark of 0.52%.

The ÁKK had planned to buy back HUF 5 bln of each set of bonds.

New bonds target municipalities

In related news, the ÁKK said on Wednesday that from September it will be issuing a bond type exclusively targeting domestic municipalities. The bonds will be purchasable through the offices of the Hungarian State Treasury, will have a three-year maturity, and carry 1.25% annual interest.

The ÁKK said the bonds will offer "attractive and safe investment options" and will decrease the expense of financing government debt as the bonds carry lower interest than similar three-year government bonds available on the wholesale market.

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