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AKK sells more than planned 3- and 5-year bonds, less long bond at auction

The Government Debt Management Agency (AKK) sold a combined HUF 52.5 billion bonds at Thursday auction, more than the announced HUF 45 billion at an auction on Thursday. AKK raised the sale of the two shorter bonds as demand was high, especially for the five-year bonds, and cut the sale of bonds maturing in 2028 on poor demand. Yields on the two shorter bonds still rose slightly.

Combined subscription for the three bonds totaled HUF 130.7 billion, well up from HUF 84.2 billion at the previous, April 7 auction, where AKK sold the announced HUF 45 billion of its usual mix of three-, five- and ten-year bonds.

AKK sold the HUF 25 billion of three-year bonds, HUF 5 billion more than announced. Primary dealers submitted bids for HUF 58.8 billion, up from HUF 41.3 billion on April 7. The average yield was 6.50%, up 1bp from the auction two weeks ago, and 2bp over Wednesday's secondary market benchmark.

AKK sold HUF 20 billion of five-year bonds, also HUF 5 billion more than planned after it received just less than HUF 60 billion bids from dealers. Demand more than doubled from HUF 27.1 billion at the previous auction. Average yield was 6.79%, up 5% from the April 7 auction and equal to the secondary market benchmark.

AKK sold the HUF 7.5 billion of the 2028/A 15-year bonds, cutting its offer from HUF 10 billion after receiving only HUF 12.1 billion bids. Bids were down from HUF 18 billion at the previous -- and first -- auction of the bonds on February 24. Average yield was 7.04%, down 51bp from the end-of-February auction. The 2028/A bonds are the longest publicly issued forint government bonds. The closest, 15-year benchmark, calculated on 2023/A bonds, stood at 7.03% on Wednesday.