ÁKK sells HUF 39 bln of bonds at switch auction, below plan

Debt

The Government Debt Management Agency (ÁKK) sold HUF 39 billion of bonds maturing in 2026 and 2028 at a switch auction on Wednesday, accepting bonds expiring in 2020 as payment, state news wire MTI reported.   

The ÁKK sold HUF 20 bln of 2026/D bonds for 2020/C bonds, in line with its original offer. Demand from primary dealers came to HUF 32.0 bln for the exchange. 

The 2026/D bonds sold at an average yield of 3.27%, while the debt manager accepted the 2020/C bonds as payment at a fixed yield of 1.18%.

The ÁKK also sold HUF 19 bln of 2028/A bonds for 2020/A bonds, HUF 1 bln less than it originally offered. Bids reached HUF 26.2 bln. The ÁKK accepted the 2020/A bonds as payment at a yield of 1.33%.   

Demand rose from the previous switch auction on August 8, when the ÁKK sold HUF 18.0 bln of 2026/D bonds at an average 3.33% yield but cancelled the 2028/A auction because of poor demand. The ÁKKʼs offer was the same then, at HUF 20 bln of each.

Of the closest secondary market benchmarks, the five-year benchmark calculated on 2024/C bonds was 2.87%, while the ten-year benchmark calculated on 2027/A bonds was 3.42%.

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