AKK raises offers on strong demand at bond auction

Hungary’s Government Debt Management Agency (AKK) raised its offers for all three terms on strong demand at a bond auction on Thursday.

AKK sold HUF 20bn of three-year bonds, raising its original offer by HUF 5bn after primary dealers submitted bids for HUF 52.8bn. Average yield was 9.41%, 4bp under the secondary market benchmark, but 110bp over the yield at the previous auction of the bonds four weeks earlier. (AKK did not accept any offers at an auction of the bonds two weeks earlier.) Yields ranged between 9.36% and 9.42%.

AKK sold HUF 12bn of five-year bonds, HUF 2bn more than planned. Bids came to HUF 24.8bn. Average yield was 9.41%, 12bp under the secondary market benchmark and 22bp lower than the yield at the previous auction of the bonds two weeks earlier. Yields ranged between 9.40% and 9.42%.

AKK sold HUF 12bn of ten-year bonds, increasing the original offer by HUF 4bn on bids of HUF 32.9bn. Average yield was 9.38%, 10bp under the secondary market benchmark and 32bp lower than the yield at the previous auction two weeks earlier. Yields ranged between 9.35% and 9.41%.

The forint firmed from 310.06 before the auction to 308.46 shortly after the results were announced.

At a non-competitive tender following the auction, AKK sold an additional HUF 7.3bn of the three-year bonds, HUF 4.2bn of the five-year bonds and HUF 4.1bn of the ten-year bonds.