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ÁKK sells HUF 34 bln of bonds at switch auction, below plan

The Government Debt Management Agency (ÁKK) sold a combined HUF 34 billion of bonds maturing in 2022 and 2026 for bonds expiring in 2019 at a switch auction on Wednesday, state news wire MTI reported.

The ÁKK sold HUF 20 bln of 2022/A bonds, accepting 2019/A bonds as payment, and HUF 14 bln of 2026/D bonds, accepting 2019/C bonds in exchange.

The scale of the sales was below the original offer, as the ÁKK had offered to sell HUF 20 bln of each of the 2022 and 2026 bonds.

Demand from primary dealers for the bonds came to HUF 41.27 bln for the 2019/A bond exchange, and HUF 19.00 bln for the 2019/C bond exchange.

The 2022/A bonds sold at an average yield of 1.68% at the exchange, while the 2026/D bonds generated an average yield of 3.07%. The average yield of the 2019/A bonds was 0.16%, while the yield of the 2019/C bonds was 0.26%.

Of the closest secondary market benchmarks, the ten-year benchmark calculated on 2027/A bonds was 3.08%, the five-year benchmark calculated on 2022/B bonds was 1.81%, and the three-year benchmark calculated on 2020/C bonds was 0.83%.