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ÁKK switch auction bond sale falls short of plan

Debt

The Government Debt Management Agency (ÁKK) sold a combined HUF 30.5 billion of bonds maturing in 2026 and 2028, accepting bonds expiring in 2020 as payment, at a switch auction on Wednesday, state news wire MTI reported.

The ÁKK sold HUF 20 bln of 2026/D bonds in exchange for 2020/B bonds, and sold a further HUF 10.5 bln of 2028/A bonds, accepting 2020/C bonds as payment.  It had offered to sell HUF 20 bln of each of the bonds at the auction. 

Demand from primary dealers came to HUF 22.39 bln for the 2026/D bonds exchange, and HUF 12.46 bln for the 2028/A exchange. 

The ÁKK accepted the 2020/C bonds at an average yield of 0.48%, and the 2020/B bonds at 0.29% in the exchange. The average auction yield of the 2026/D bonds was 2.30%, while the yield was 2.50% for the 2028/A bonds.

Of the closest secondary market benchmarks, the three-year benchmark calculated on 2021/C bonds was 0.82%, the five-year benchmark calculated on 2022/B bonds was 1.25%, and the ten-year benchmark calculated on 2027/A bonds was 2.39%.

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