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ÁKK issuance at 80% of full-year target 

Debt

Issues of government securities reached HUF 7.641 trillion in January-September, 80% of the full-year target, the Government Debt Management Agency (ÁKK) said on Monday, according to a report by state news wire MTI.

Issues of forint bonds subscribed by institutional investors reached HUF 3.035 tln at end-September, 89% of the full-year target. Retail forint issuance stood at HUF 2.768 tln, 76% of the target. FX financing came to HUF 1.838 tln, 72% of the full-year target.

ÁKK noted that non-resident institutional investors held 23.1% of forint government securities at the end of September, down from 23.9% at the end of 2020.

The agency's strategic goal continues to be the "gradual further increase" of average time to maturity of the debt portfolio "in line with market conditions".

Government securities held by households rose by HUF 624 bln to HUF 9.598 tln in January-September. 

ÁKK said that the early redemption rate for the popular Plus retail bonds, which pay an annualized return of 4.95% if held for the full five-year maturity, was 2.6% in Q3, practically level with the 2.5% average early redemption rate since the security was launched in June 2019.

The agency noted that it issued a USD 2.25 bln 10-year, USD 2 bln 30-year and EUR 1 bln seven-year FX bond in September to "bridge-finance potentially delayed EU RRF transfers and to finance other discretionary government expenditures in 2021 as well as to pre-finance some 2022 budgetary expenditures".

ÁKK said it could issue another green FX renminbi bond in the last quarter of the year, "provided that the necessary regulatory approvals are available and market conditions are appropriate".

The agency noted that the full-year FX loan target of EUR 1.3 bln was only 34% fulfilled at the end of September. ÁKK said that it expects "additional borrowings towards the end of the year" but added that "it is expected that the remaining foreign currency financing limits will not be fully utilized".

ÁKK reiterated its strategic goal of keeping the FX debt ratio within a benchmark reference range of 10%-20%.

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