ÁKK sells HUF 28.5 bln of bonds at switch auction

Debt

At a switch auction on Wednesday, the Government Debt Management Agency (ÁKK) sold HUF 28.5 bln of bonds maturing in 2024 and 2025 for bonds expiring in 2018 and 2019, state news agency MTI reports.

The ÁKK sold HUF 20 bln of 2024/B bonds, accepting 2018/A bonds as payment, and a further HUF 8.5 bln of 2025/B bonds for 2019/A bonds. It originally planned to sell HUF 20 bln of both papers.

Demand from primary dealers for the 2024/B bonds came to HUF 23.26 bln, and to HUF 46.43 bln for the 2025/B bonds.

The 2024 bonds sold at an average yield of 2.90% at the exchange and the 2025 bonds at 3.01%. Of the closest secondary market benchmarks, the five-year benchmark calculated on 2021/B bonds was 1.90%, while the ten-year benchmark calculated on 2027/A bonds was 3.31%.

The debt manager accepted the 2018/A bonds, expiring on December 20, 2018, as payment at a yield of 0.40%. It accepted the 2019/A bonds, which mature on June 24, 2019, at a yield of 0.83%.

Also on Wednesday at a reverse auction, the ÁKK bought back a combined HUF 56.3 bln of bonds that expire in 2018 before maturity.

The ÁKK bought back HUF 18.76 bln of 2018/B bonds, which mature on April 25, 2018. Bids reached HUF 19.18 bln, with the average repurchase yield at 0.22%. It also bought back HUF 37.57 bln of 2018/C bonds maturing on June 22, 2018. Bids reached HUF 40.79 bln, with an average repurchase yield of 0.24%.

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