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ÁKK raises sale of twelve-month T-bills, five-year floaters on high demand

Hungary's Government Debt Management Agency (ÁKK) sold HUF 60 billion twelve-month discount T-bills and HUF 7 billion of five-year floating-rate bonds at auctions on Thursday, raising the sales on high demand.

The average twelve-month yield fell from two weeks earlier but was up on the benchmark. The bond's price rose after dropping at its previous auction on February 3.

ÁKK sold HUF 60 billion of the twelve-month bills, raising the announced volume by HUF 10 billion after receiving bids for HUF 188.7 billion. Auction demand for the bills was the highest since September 2009. Primary dealers submitted bids for HUF 121.2 billion at the previous auction held on February 17.

Average yield at the auction was 5.93%, up 8 bp from Wednesday's secondary market benchmark, and 4 bp down from the average auction yield of the bills two weeks earlier. Yields varied between 5.90% and 5.96%, compared to the 5.90%-5.99% range at the previous auction.

This was the first auction of the bills which will expire on March 7, 2012. The bill auctioned two weeks earlier, which was and remained the twelve-month benchmark, will expire two months earlier, on January 11, 2012.

ÁKK returned to the previous HUF 50 billion per auction offer in January after offering HUF 40 billion bills of the twelve-month bills at auctions between November 25 and December 23.

Primary dealers submitted HUF 34.6 billion bids for the 2015/B bonds, expiring on December 22, 2015, of which ÁKK accepted HUF 7 billion, HUF 2 billion more than the announced volume. Demand jumped from 12.7 billion at the previous auction of the bonds on February 3 when ÁKK sold the announced HUF 5 billion. Subscription of the floating-rate bond was the highest since HUF 42 billion late March 2010.

The 2015/B bonds sold at an average price of 96.32%, over the 96.10% average at the February 3 auction. The bonds have an interest pegged to 3-month discount T-bill auction yields, paid twice yearly.

ÁKK auctions twelve-month bills bi-weekly on Thursday. It started to regularly auction floating-rate bonds together with twelve-month bills once a month last autumn.