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ÁKK securities, switch sales fall short of plan

Debt

The Government Debt Management Agency (ÁKK) sold a combined HUF 21 billion of securities at auction on Thursday, lowering its original offer by HUF 24 bln.  Sales at a switch auction Wednesday also fell short of plan.

The ÁKK sold HUF 15.0 bln of 12-month discount T-bills on Thursday, HUF 25 bln below its original offer. Bids came to HUF 26.93 bln, and the average yield was 0.40%, 6 basis points over the secondary market benchmark and 12 bps higher than the yield at the previous auction of the bills two weeks earlier.

In addition, the ÁKK sold HUF 6 bln of five-year floating-rate bonds, raising its offer by HUF 1 bln after dealers bid for HUF 9.53 bln of the papers.

Earlier, at a switch auction Wednesday, the ÁKK sold HUF 10.5 bln of bonds maturing in 2026, accepting bonds expiring in 2019 as payment.

The ÁKK had offered to sell HUF 20 bln of the 2026/D bonds. Demand from primary dealers came to HUF 16.5 bln for the exchange with the 2019/C bonds.

The 2019/C bonds sold at an average yield of 0.42% at the completed exchange. The average yield of the 2026/D bonds was 3.26%.

Of the closest secondary market benchmarks, the three-year benchmark calculated on 2021/C bonds was 1.27%, while the five-year benchmark calculated on 2022/B bonds was 1.84%.

(The agency had also planned to exchange HUF 20 bln of 2024/B bonds for 2019/A bonds, but as demand by primary dealers only reached HUF 3 bln, it cancelled this auction. )

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