ÁKK sells more than planned 5- and 15-year bonds at auction

Debt

Unlike the recent short-term auctions, demand was strong at the Government Debt Management Agency's (ÁKK) bond auction on Thursday. ÁKK raised its sale of five- and 15-year bonds and sold the originally offered amount of three-year bonds.

Combined auction sales totalled HUF 65 bln against the HUF 50 bln original offer. ÁKK sold another HUF 14.4 bln bonds at the non-competitive tender following the auction.

Auction yields fell further from the previous auction, and were around the respective secondary market benchmarks.

Demand for the three-month bond fell but rose sharply for the five-year bond compared to their previous auction on October 22. The 15-year bond, last auctioned on June 12, was almost three times oversubscribed.

ÁKK sold the planned HUF 20 bln of the three-year bonds, after receiving HUF 38.4 bln bids from primary dealers. Bids fell sharply from HUF 85.2 bln at the previous auction on October 22. Non-competitive sales of the bonds totalled HUF 2.4 bln against an available HUF 7.5 bln.

Average three-year yield fell further to 2.88%, which is 1 bp over Wednesday's secondary market benchmark while 8 bp lower than the yield at the October 22 auction. Yields ranged between 2.85% and 2.92%.

ÁKK sold HUF 30 bln of five-year bonds, HUF 10 bln more than planned. Bids came to HUF 65.9 bln, up from slightly under HUF 40 bln two weeks earlier. It sold a further HUF 6.8 bln bonds of the HUF 11.6 bln on offer at the non-competitive tender.

Average five-year yield was 3.36%, down by a sharp 25bp from the previous auction and down just 1 bp from the respective secondary market benchmark. Even with the increased sales, yields moved in a narrow range between 3.35% and 3.37%.

Sales of the 15-year bond, at HUF 15 bln, were over the HUF 10 bln pre-announced offer. ÁKK sold an additional HUF 5.2 bln 15-year bonds, almost the maximum available, at the non-competitive tender. The average yield came to 4.26%, in line with the 15-year secondary market benchmark and down 67 bp from the average at the previous 15-year bond auction in June. Here too, yields were in a narrow range, between 4.25% and 4.28%.

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