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AKK raises offer at bond auction on strong demand for three-year term

The Government Debt Management Agency (AKK) raised its offer for three-year bonds on strong demand at an auction on Thursday.

AKK sold HUF 30 billion of the three-year bonds, raising its original offer by HUF 10 billion after primary dealers bid for HUF 70.3 billion. The average yield was 7.42%, 9bp under the secondary market benchmark and 35bp below the yield at the previous auction of the bonds two weeks earlier. Yields ranged between 7.38% and 7.46%.

AKK sold HUF 15 billion of the five-year bonds, the announced amount. Offers came to HUF 37.1 billion. The average yield was 7.62%, 14bp under the secondary market benchmark and 29bp lower than the yield at the previous auction. Yields ranged between 7.60% and 7.65%.

AKK sold HUF 10 billion of the ten-year bonds, also in line with the original offer. Dealers bid for HUF 20.6 billion. The average yield was 7.78%, 2bp under the secondary market benchmark and 12bp below the yield at the previous auction. Yields ranged between 7.75% and 7.79%.

AKK offered the three-year and the ten-year series for the first time on Thursday. The three-year carries a 6.75% annual coupon and will expire on August 22, 2014. It replaces the 2014/ bond which expires six months earlier on January 12, 2014, and has a lower coupon of 5.5%. The new ten-year series is the 2022/A bond, which expires on June 24, 2022, and has a 7% annual coupon. It has most almost two years more to maturity and a 0.5 percentage points lower coupon than the outgoing 2020/A bond. (MTI Econews)