Compared to the original Q4 financing plan released a month earlier, the debt manager increased the volume of short-term bonds to be exchanged into longer ones at the period’s switch actions and somewhat raised the target for net discount T-bill repayments.

The moderate revision suggests that ÁKK does not see the need either to raise more finance for an excess deficit or to reduce issuance sharply as it did last year to keep the year-end state debt-to-GDP ratio on a falling trend.

ÁKK’s practice is to update the Q4 plan at the end of the year until the announcement of the annual financing strategy for the next year rather than publishing as usual a rolling plan for the next three months. ÁKK usually announces the yearly financing strategy in December.

ÁKK now plans net forint securities issues of HUF 181 bln in October-December rather than the HUF 223 bln planned one month earlier.

ÁKK raised gross bond issues planned in Q4 by HUF 100 bln to HUF 730 bln and plans to buy back HUF 187 bln of bonds ahead of maturity at the six reverse auctions of the period instead of the originally planned HUF 120 bln. Gross bond expiries in September-December will now total HUF 312 bln rather than HUF 197 bln.

Nearly half of the increase in gross bond issues and more than 40% of the increase in gross expiries is expected to come from increased volumes at the period’s three switch auctions. ÁKK now plans to switch HUF 107 bln bonds nearing to maturity into longer-term ones rather than just HUF 60 bln as planned one month earlier.

Excluding the switch auctions, ÁKK plans to sell now on average HUF 52 bln of bonds instead of the previously planned HUF 47.5 bln average at the twelve fixed- and floating rate auctions to be held in the period.

Parallel with the higher gross and net bond issues, the debt manager cut the planned gross twelve-month discount T-bill issues by just HUF 17 bln to HUF 293 bln while leaving the respective expiries unchanged at HUF 375 bln. This comes to an average HUF 2.4 bln cut in the per auction sales, to HUF 42 bln.

ÁKK also raised the plan for three-month discount T-bill expiries by HUF 10 bln, updating the plan with the latest auction results. It left gross three-month issues unchanged at HUF 540 bln.

ÁKK recently has offered HUF 55 bln-HUF 60 bln of fixed-rate bonds and HUF 20 bln of floating rate bonds but sold more on big oversubscription. It is offering HUF 40 bln twelve-month as well as three-month discount T-bills per auction.