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ÁKK exchanges HUF 40 bln of bonds at switch auction

The Government Debt Management Agency (ÁKK) exchanged bonds maturing in 2020 for HUF 40.0 billion of bonds maturing in 2025 and 2026 at a switch auction on Wednesday, state news wire MTI reported.

Primary dealers bid for HUF 56.0 bln of 2025/B bonds, of which the debt manager exchanged the originally offered HUF 20 bln for 2020/B bonds.

The ÁKK also sold HUF 20 bln of 2026/D bonds, the planned volume, in exchange for 2020/B bonds at the switch auction, after receiving HUF 34.1 bln worth of bids.

The 2025/B bonds were sold at an average yield of 1.57%, and the 2026/D bonds at an average yield of 1.89% in the exchange.

The ÁKK accepted 2020/B bonds which expire on June 24, 2020, at a price corresponding to a yield of 0.28% in both exchanges. The average yields compare to a 10-year secondary market benchmark yield, calculated on 2027/A bonds, of 1.93%.

The auction was the first switch auction held by the ÁKK since September 2017.