Hungary's Government Debt Management Agency (AKK) sold HUF 55 billion of three-, five- and ten-year bonds at an auction on Thursday, raising the announced volume by HUF 5 billion for five-year bonds as demand returned to usual levels after rising sharply two weeks earlier. Auction yields fell sharply compared to the last auction but slightly exceeded Wednesday's respective benchmarks.
Subscription for the three bonds totaled HUF 127.7 billion, back to usual levels after jumping to an exceptionally high HUF 194.3 billion at the previous auction on September 9, boosted by the government's pledge to keep to the below-3% fiscal deficit next year. On September 9 AKK raised its sales by HUF 20 billion to HUF 70 billion and sold another HUF 25.3 billion of the bonds, the maximum amount available, at the non-competitive tender following the auction.
AKK sold HUF 20 billion of the 2014/C series bonds, the announced amount. Bids for the papers came to HUF 51.1 billion, down from HUF 72.4 billion two weeks earlier. Average yield was 6.78% , 3bp over the secondary market benchmark set on Wednesday but still 30bp below the 7.18% yield at the previous auction of the bonds two weeks earlier.
AKK sold HUF 20 billion of five-year 2016/C bonds, raising the announced amount by HUF 5 billion, after primary dealers submitted bids for HUF 42.2 billion, compared to their HUF 71.4 billion bids two weeks earlier. Average yield was 6.82%, 4bp above the respective secondary market benchmark and 39bp below the average yield at the previous auction.
AKK sold HUF 15 billion of ten-year bonds, the original offer after receiving bids for HUF 34.7 billion. Bids for the bonds totaled HUF 50.5 billion at the September 9 auction. Thursday's average auction yield for the bonds was 6.93%, 7bp over the latest ten-year secondary market benchmark but 42bp lower than the 7.35% average auction yield two weeks earlier. (MTI-Econews)