ÁKK raises sale of all terms on good demand at bond auction


Hungary's Government Debt Management Agency (ÁKK) raised its sales on all three terms on good demand at an auction of three-, five-year and ten-year bonds on Thursday. Demand remained high at the non-competitive tender following the auction where ÁKK sold HUF 14.3 billion bonds, bringing Thursday's primary bond sales to a combined HUF the HUF 63.3 billion.

Yields fell compared to the latest secondary market benchmarks. The three- and five-year yields also fell compared to their latest auction on February 23. The auction yield rose for the ten-year bonds which were last auctioned early February.

ÁKK sold a combined HUF 49 billion of the three bonds on offer at the auction, raising its sales from an announced amount of HUF 40 billion.

ÁKK raised its sale of the three-year bonds by HUF 4 billion to HUF 22 billion after primary dealers bid to buy HUF 42.0 billion of the papers. Demand doubled from the previous auction on February 23 when the debt manager cut its three-year sale by HUF 3 billion to HUF 17 billion after bids hardly exceeded the announced amount. ÁKK sold a further HUF 6.6 billion three-year bonds as against the HUF 7.8 billion available at the non-competitive tender.

The average three-year auction yield was 8.32%, dropping 8bp from the previous auction and down 6bp from the respective secondary benchmark on Wednesday.

ÁKK raised its offer of the five-year bonds by HUF 3 billion to HUF 15 billion on bids of HUF 29.4 billion. Bids fell from HUF 41.7 billion at the February 23 auction when ÁKK raised its sales from an announced HUF 10 billion to HUF 18 billion in light of strong demand. Demand and sale at the non-competitive tender after the auction was HUF 4.6 billion, near to the HUF 5.0 billion available.

The five-year average auction yield was 8.57%, down 5bp both from the auction average two weeks earlier and the secondary market benchmark on Wednesday.

ÁKK sold HUF 12 billion of ten-year bonds instead of the announced HUF 10 billion after receiving bids for HUF 22.9 billion. The last auction of the bonds on February 9 saw bids of HUF 19.9 billion against an announced amount of HUF 8 billion, and ÁKK raised its sales to HUF 10 billion. Non-competitive tender bids and sales of ten-year bonds totaled HUF 3.1 billion compared to the HUF 3.9 billion available.

The ten-year average auction yield came to 8.60%, down 10bp from the latest benchmark but up 30bp from the February 9 auction.


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