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AKK raises sales again for all three terms, yields drop at bond auction

The Government Debt Management Agency (AKK) raised its sales for all three bonds from the pre-announced volumes on more than five-fold oversubscription at Thursday's bond auction, selling a combined HUF 65 billion instead of the originally announced HUF 45 billion.

Auction subcription for the regular offer of three-, five- and ten-year fixed-rate bonds jumped to HUF 238.4 billion from an already strong HUF 170.7 billion at the previous auction on March 10, when AKK also raised its sales by HUF 20 billion to HUF 65 billion.

Despite the raised sales, auction yields fell sharply not only from the previous auction, but also compared to Wednesday's benchmark. Demand focused on the two shorter bonds.

AKK sold HUF 30 billion of three-year bonds, raising its original offer by HUF 10 billion after primary dealers submitted bids for HUF 108.1 billion of the bonds. Average yield was 6.68%, 11bp below the secondary market benchmark, and 24bp under the yield at the previous auction of the bonds two weeks earlier.

AKK sold HUF 20 billion of five-year bonds, HUF 5bn more than planned. Dealers bid for HUF 100 billion of the bonds. Average yield was 7.03%, 12bp under the secondary market benchmark, and 28bp under the yield at the previous auction of the bonds two weeks earlier.

AKK sold HUF 15 billion of ten-year bonds, raising its offer by HUF 5 billion on bids for HUF 30.3 billion. Average yield was 7.20%, 6bp down from the secondary market benchmark and 24bp under the yield at the previous auction.

The Government Debt Management Agency (AKK) raised its offers by the same volumes, respectively, for all three bonds at the previous auction, selling a combined HUF 65 billion at the auction, and an additional HUF 6.1 billion at the non-competitive tender held after the auction.