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ÁKK T-bill sale above plan; switch sales fall short

Debt

The Government Debt Management Agency (ÁKK) sold HUF 55.0 billion of discount three-month T-bills at auction on Wednesday, raising its original offer by HUF 5.0 bln on strong demand from primary dealers. Sales at switch auctions fell well short, however.

Bids for the three-month T-bills came to HUF 82.79 bln. The average yield was 0.06%, 5 basis points over the secondary market benchmark and 1 bp higher than the yield at the previous auction of the papers last week.

The ÁKK also sold a combined HUF 16 bln of bonds maturing in 2026, accepting bonds expiring in 2019 and 2020 as payment, at a switch auction on Wednesday.

The ÁKK sold HUF 5 bln of 2026/D bonds in exchange for 2019/A bonds, and HUF 11 bln in exchange for 2020/B bonds. It had offered to sell HUF 20 bln of the 2026/D bonds at each of the auctions.       

Demand from primary dealers came to HUF 7.15 bln for the exchange with the 2019/A bonds, and HUF 17.65 bln for the 2020/B bonds exchange. 

The 2019/A bonds sold at an average yield of 0.05% at the exchange, while the 2020/B bonds had an average yield of 0.29%. The average yield of the 2026/D bonds was 2.46%.

Of the closest secondary market benchmarks, the three-year benchmark calculated on 2021/C bonds was 0.73%, the five-year benchmark calculated on 2022/B bonds was 1.27%, and the ten-year benchmark calculated on 2027/A bonds was 2.52%.

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