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ÁKK raises longer bond sales on strong demand at auction

On continued strong demand, the Government Debt Management Agency (ÁKK) raised its sales of the two longer terms at a bond auction on Thursday. The debt manager sold HUF 57.5 billion of three bonds at the auction and sold an additional HUF 18.4 billion at the non-competitive tender following the auction. Average auction yields rose from the previous auction held two weeks ago but were around the respective benchmarks.

ÁKK sold a combined HUF 57.5 billion of three-, five- and ten-year bonds, raising its offer from HUF 45 billion after receiving offers for a combined HUF 179 billion. Demand continued to focus on the five-year bonds which attracted just HUF 100 billion in bids. Demand fell but still remained high for the two other bonds.

ÁKK sold the announced HUF 20 billion of three-year bonds as bids by primary dealers fell to HUF 41.4 billion from HUF 75.0 billion at the previous auction on May 19. ÁKK sold an additional HUF 7.4 billion bonds, just HUF 120 million less than available, at the non-competitive tender. Average yield was 6.68%, up 20bp from the May 19 auction, and up 6bp from the secondary market benchmark on Wednesday.

ÁKK sold HUF 22.5 billion of five-year bonds, raising its original offer by HUF 7.5 billion as it did at the previous auction. Non-competitive sales totaled HUF 5.4 billion compared to the HUF 8.4 billion up for sale. Dealers bids rose to HUF 100 billion from an already high HUF 83.5 billion at the previous auction. Average yield was 7.01%, up 15bp from two weeks earlier, and the same as the respective secondary market benchmark on Wednesday.

ÁKK sold again HUF 15 billion of ten-year bonds, HUF 5 billion more than the announced amount. Offers dropped to HUF 37.6 billion from an unprecedented HUF 65.5 billion at the May 19 auction. Non-competitive sales of these bonds came to HUF 5.6 billion matching the maximum available. Average yield was 7.19%, 1bp under the secondary market benchmark, but up 17bp from the previous auction of the bonds two weeks earlier.

Subscription rose further from an already high HUF 164 billion for the same offer at the May 19 auction, when ÁKK sold HUF 67.5 billion bonds at the auction itself and sold another HUF 19.9 billion at the non-competitive tender.