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ÁKK reaches 32% of annual issue plan at end-March

Debt

The Government Debt Management Agency (ÁKK) has said it reached 32% of its annual issue plan by the end of the first quarter, according to a report by state news wire MTI.

ÁKK issued HUF 2.266 trillion of securities, not including switch issues, compared to a HUF 7.078 tln full-year target.

First-quarter issues included HUF 683 bln of forint bonds and HUF 321 bln of forex bonds to institutional investors. 

Outstanding debt held by institutional investors reached HUF 21.848 tln at the end of March and included HUF 125 bln of municipal bonds.

Non-resident holdings accounted for 20.7% of the total, a little higher than the 20% rate at the end of 2021.

ÁKK noted that it issued JPY 75.3 bln of Samurai bonds in February, before the outbreak of the Russio-Ukrainian war, and drew down EUR 147 million from the European Union's SURE lending facility at the end of March.

The ratio of FX debt reached 20.4% at the end of the quarter, still under the top of AKK's 10-25% benchmark reference range, leaving "significant headroom" for net FX financing, the agency said.

"Additional FX market operations may be carried out during the rest of the year in line with the approved financing plan if market conditions prevail," it added.

Retail issues came to HUF 1.262 tln or 38% of the annual target, supported by over HUF 500 bln in issues of the five-year, inflation-linked Premium Hungarian Government Security. However, ÁKK said total outstanding retail security stock now stands at HUF 9.796 tln, HUF 117 bln under the level at the end of 2021. The stock rose by HUF 143 bln in January-February, in line with the pro rata target, but market turbulence after the outbreak of the war and rising interbank interest rates caused a HUF 260 bln decline in the stock, mainly through early redemptions of the earlier popular Hungarian Government Securities Plus bonds. Around 10% of investors redeemed the Plus bonds in the first quarter, compared with an average early redemption rate of 3.9% since the security's launch in June 2019.

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