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AKK raises sales, yield still drop at three-month T-bill auction

The Government Debt Management Agency (AKK) sold HUF 65 billion of three-month discount T-bills at an auction on Tuesday, raising the announced volume by HUF 15 billion as demand jumped from already high levels. AKK raised the sale unusually steeply, but yields still fell from the previous auction although were a tad over the respective benchmark.

Higher auction sales will provide additional liquidity at lower yields for the last months of the year, AKK deputy CEO László András Borbély told Econews. Another positive point is that the bills will expiry before the end of the year, he added.

The State Treasury usually needs interim finance in November and December before the big year-end tax payments arrive in the Treasury in late December. The bills auctioned will expire on December 29, thus will not remain outstanding by the end of the year, a key date for assessing the country's gross Maastricth debt.

AKK received bids for HUF 202 billion nominal value bills on Tuesday, far more than the HUF 131.1 billion subscription at the previous auction held on September 14, when it raised its sales by HUF 10 billion to HUF 60 billion, as it did at the previous two auctions. Subscription was the highest since the first auction of 2010.

Average yield was 5.43%, down 5bp from the average yield at the previous auction of the bills one week earlier, and 1bp over the yield of the secondary market benchmark, calculated for the bill series maturing on January 26, four weeks after the bill sold at the auction. Accepted yields ranged between 5.37% and 5.45% as the range moved down from between between 5.39% and 5.50% a week earlier.

Oversubscription at the weekly auctions has been high, at well above HUF 100 billion, since late July, and it has been steadily around or over HUF 130 billion since August 10. AKK raised its auction offer from HUF 45 billion to HUF 50 billion for the August 10 auction. (MTI-Econews)