ÁKK raises sales of shorter bonds on good demand, yields around secondary market


Auction demand was high, and Hungary’s Government Debt Management Agency (ÁKK) raised the sale of three-year and five-year bonds and sold the announced volume ten-year bonds on high oversubscription at an auction on Thursday.

Yields were sharply up from the previous auction but were around Monday’s secondary market benchmarks, except for a moderate rise on the ten-year term.

The average yields were the highest since July-August 2009, and the three-year and five year auction yield surpassed 8% for the first time since late September 2009. The ten-year auction yield rose over 8% already late in September.

The range of accepted yields narrowed dramatically, to 2-4bps. The number of submitted bids was about double while that of accepted bids similar to the previous auction of the same bonds, held on November 3.

ÁKK sold a combined HUF 46bn of the three bonds instead of the announced HUF 38bn. Demand was back at the September levels after fluctuating demand and reduced sales at the two auctions held in October and the previous one.

Primary dealers bought an additional HUF 12.6bn of the three bonds at the non-competitive tender held after the auction where primary dealers may buy additional bonds at the average auction price/yield.

ÁKK sold HUF 20bn instead of the announced HUF 15bn of three-year bonds on fourfold subscription. Bids totaled HUF 60.5bn, up sharply from just HUF 23.3bn for the HUF 20bn on offer at the November 3 auction when ÁKK cut the three-year sale to HUF 15bn.

ÁKK sold an additional HUF 5.4bn of the bonds at the non-competitive tender where a total of HUF 7.1bn was offered of the bonds.

The average three-year yield came to 8.38%, down 1bp from the respective Monday secondary market benchmark although up 73bp from the previous auction, reflecting the yield rise in the past two weeks.

The debt manager sold HUF 18bn instead of the planned HUF 15bn of five-year bonds which were three times oversubscribed, with bids totaling HUF 47bn as against HUF 19.5bn for the same offer and sale on November 3.

ÁKK offered HUF 6.6bn five-year bonds for the non-competitive tender and sold HUF4.6bn.

The five-year yield averaged 8.68%, rising just 2bp from the secondary market benchmark on Monday, and was up 76bp from the previous auction.

ÁKK sold the planned HUF 8bn of ten-year bonds against demand for HUF 27.3bn. Demand was up from a healthy HUF 17bn two weeks earlier but ÁKK sold only the announced amount, apparently unwilling to sell more of the long bond at the present high yields.


Investors purchased a further HUF 2.6bn of ten-year bonds, the full volume available, at the non-competitive tender.

The average ten-year yield was 8.78%, up 8bp from the respective secondary market benchmark yield on Monday, and rose 61bp from the previous auction held two weeks earlier.

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