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AKK raises 3- and 5-year bond sales, cuts 15-year sales at auction, yields drop

The government debt management agency ÁKK sold more than planned three- and five-year bonds on strong demand at an auction on Thursday, and cut 15-year bond sales which were hardly oversubscribed. Yields fell sharply from the previous auction of the bonds and, for the two shorter bonds, were also sharply down from Wednesday's respective secondary market benchmarks.

The combined auction sale totalled HUF 54 billion compared to the original offer of HUF 45 billion. Combined subscription rose to HUF 122.8 billion from HUF 99 billion at the previous auction held two weeks earlier where ÁKK sold 10-year bonds together with 3- and 5-year ones.

ÁKK sold HUF 25 billion of three-year 2014/D bonds, more than the announced HUF 20 billion after primary dealers submitted bids for HUF 53.1 billion, only slightly less than the HUF 57.7 billion subcriptions two weeks earlier when ÁKK raised its offer from HUF 15 billion to HUF 22.5 billion.

Average three-year yield at the auction was 5.83%, down sharply from 6.23% two weeks earlier and also down 17 basis points from the secondary market benchmark on Wednesday.

ÁKK sold HUF 22.5 billion of the five-year 2017/A bonds, raising the announced amount by HUF 7 billion. Bids came to HUF 59.4 billion, more than double of the HUF 27.3 billion received at the previous auction when ÁKK sold the announced HUF 20 billion five-year bonds.

Average five-year yield was 6.46%, down 49 basis points from the previous auction and 15 basis points under the respective secondary market benchmark on Wednesday.

ÁKK sold HUF 6.5 billion of the 15-year 2028/A bonds instead of the announced HUF 10 billion, after receiving bids for just HUF 10.3 billion. Demand was weak at the previous auction of the 15-year bonds on June 30 too, when ÁKK cut its sales by HUF 2 billion to HUF 8 billion after receiving bids for HUF 12.4 billion.

Average 15-year yield was 6.93%, well down from 7.31% on June 30 and down 3 basis points from the secondary market benchmark.