Hungary's government debt manager AKK will offer HUF 14 billion of nominal value government bonds due in 2023 in exchange for bonds expiring in 2011 and 2012 at a bond exchange auction on Wednesday. In a separate move, AKK has shifted the composition of its usual HUF 50 billion auction mix towards longer maturities, offering fewer 3-year and more ten-year bonds for the Thursday bond auction.
At Wednesday's exchange auction, AKK will auction HUF 7 billion 2023/A bonds – the current 15-year benchmark bond – in exchange for 2011/B bonds and another HUF 7 billion of 2023/A bonds in exchange for 2012/C bonds on Wednesday. AKK will announce the price at which the shorter bonds will be calculated as payment early on Wednesday, before the auction.
The exchange auction follows a successful similar auction last Wednesday where the debt manager offered and sold a combined HUF 20 billion of 2019/A bonds in exchange for 2011/ and 2012/B bonds. AKK had offered a shorter bond: 2014/C bonds – which recently became the three-year benchmark bond – at its previous exchange auctions held between November and late April.
At its regular bond auction on Thursday, AKK will offer HUF 20 billion of 2014/C bonds, the new three-year benchmark, cutting its three-year offer by HUF 5 billion compared to earlier. It will offer the usual HUF 15 billion of five-year 2016/C bonds and HUF 15 billion – HUF 5 billion more than usual – of ten-year 2020/A bonds.
The 2014/C bonds were first issued in June 2003, they have a 5.50% coupon and will expire on February 12, 2014. The outstanding stock on the market was HUF 480 billion on June 30. They replace as benchmark the 2013/E bonds which are five and half months shorter.
The 2023/A bonds offered at the Wednesday exchange auction, first issued in January 2007, were last auctioned in July, and mature on November 24, 2023. They carry a 6.00% coupon, and the volume outstanding on the market is HUF 242 billion, Econews calculated based on AKK figures for June 30.
The 2011/B bonds, accepted as payment, were issued first in January 2006. They carry a 6.00% annual coupon and will expire on October 12, 2011. The volume outstanding of the series is HUF 353 billion.
The 2012/C bonds were first issued August 2007, carry a fixed 6.00% annual coupon and will expire on October 24, 2012. The volume outstanding is HUF 450 billion. (MTI-Econews)