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AKK cuts auction sale of 15-year bond, yields at or slightly above benchmarks

The Government Debt Management Agency (AKK) sold the announced volumes of three- and five-year bonds but cut sales of the 15-year bonds on poor demand at an auction on Thursday. Subscription of the two shorter bonds rose. Auction yields matched or slightly exceeded the respective secondary market benchmarks.

AKK sold HUF 20 billion of 2014/D bonds, the announced amount. Primary dealers submitted bids for HUF 53.3 billion, up from HUF 39.5 billion at the previous auction held on June 16. Average yield came to 6.70%, the same as Wednesday's respective secondary market benchmark but 12bp over the yield at the previous auction. Yields ranged between 6.65% and 6.71%.

AKK sold HUF 15 billion of 2017/B bonds, in line with the original offer. Dealers' bid rose to HUF 38.4 billion from HUF 31.9 billion at the June 16 auction. Average yield was 7.11%, 2bp over the secondary market benchmark, and 16bp over the yield at the previous auction two weeks earlier. Yields ranged between 7.00% and 7.13%.

AKK sold HUF 8 billion of 2028/A bonds, cutting its offer by HUF 2 billion as offers came to HUF 12.4 billion. Demand was a tad higher than the HUF 12.1 billion bids received at the last auction of the bonds, which are the 15-year benchmark papers, on April 21. Average yield was 7.31%, 1bp over the secondary market benchmark and 27bp higher than the yield at the April 21 auction. Yields ranged between 7.28% and 7.32%.

Combined demand for the three bonds, at HUF 104.1 billion, was higher than the HUF 91.5 billion subscription at the previous bond auction on June 16 where AKK sold the announced HUF 45 billion of its usual mix of three-, five and ten-year bonds. No offers were made at a non-competitive tender following the June 16 auction.