ÁKK sells more bonds than planned at auction, yields jump

Debt

Hungary’s Government Debt Management Agency (ÁKK) sold a combined HUF 56 bln of bonds at auction on Thursday, over the original offer, Hungarian news agency MTI reported. Auction yields rose sharply after comments by Federal Reserve Chair Janet Yellen on continuing U.S. rate rises.

The ÁKK sold the announced HUF 20 bln of three-year bonds. Primary dealers bid for HUF 56.9 bln of the papers. The average yield was 1.33%, 16 bps over the yield at the previous auction of the securities two weeks earlier.

The ÁKK sold HUF 21 bln of five-year bonds, HUF 6 bln more than planned. Bids reached HUF 49.9 bln. The average yield was 2.10%, 10 bps over the yield at the previous auction on January 5.

Both of the bonds are new, auctioned only for the second time, and mature about one year later than the respective three and five-year benchmark bonds.

The ÁKK also sold HUF 15 bln of ten-year bonds, raising its original offer by HUF 5 bln. Offers came to HUF 59.6 bln. The average yield was 3.43%, two bps below the secondary market benchmark, while 19 bps over the yield at the auction two weeks earlier.

Three-year and five-year auction yields have been rising after hitting lows of 1.03% and 1.94%, respectively, on December 8. The ten-year yield rose after dropping since late November.

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