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ÁKK raises sale on big demand at bonds at auction, yields drop

Debt

The Government Debt Management Agency (ÁKK) sold a combined HUF 80 bln of bonds at auction on Thursday, raising its offer of all three bonds on sale on more than three-fold oversubscription.

The three- and five-year average yields fell again after some rise at the December 11 auction, and all three yields reached new lows.

The auction was the first fixed-rate bond auction since the December 11 one where ÁKK sold the planned HUF 52 bln bonds on double subcription.

ÁKK originally offered HUF 55 bln of three-, five- and ten-year bonds for the current auction.

ÁKK sold HUF 30 bln of the three-year bonds, raising its auction offer by HUF 10 bln after receiving bids for HUF 94.5 bln. Demand nearly tripled from December 11. Average yield was 2.54%, 3bp under the secondary market benchmark and 4bp under the yield at the previous auction. Yields moved in a narrow range between 2.52% and 2.55%.

ÁKK sold HUF 30 bln of the five-year bonds, also raising its offer by HUF 20 bln. Here primary dealers bid for HUF 60 bln, about HUF 13 bln more than for the same offer at the December 11 auction. Average yield was 2.96%, 7bp under both the benchmark and previous auction's average. Yields ranged between 2.93% and 2.97%.

ÁKK raised its offer for the ten-year bond from HUF 15 bln to HUF 10 bln as bids came to just HUF 28.4 bln. Demand dropped more than HUF 8 bln from the previous auction of the ten-year bonds on November 27. Average yield was 3.42%, 7bp under the benchmark and 13bp lower than the yield at the late November auction. Yields ranged between 3.37% and 3.45%.

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