Hungary's Government Debt Management Agency (AKK) sold HUF 60 billion of twelve-month discount T-bills at lower yields at an auction on Thursday, raising the sales on fourfold subscription. Demand dropped but was still almost threefold for the five-year floating-rate bonds of which AKK sold HUF 7.5 billion also more than planned.
AKK offered HUF 50 billion but sold HUF 10 billion more of the new bill series expiring on May 2, 2012 after receiving bids for HUF 203.0 billion. Demand jumped to the highest level since the autumn of 2009. AKK received HUF 120.5 billion bids at the previous auction on April 14, when it sold the announced HUF 50 billion of bills expiring on March 7.
Average yield at the auction was 5.93%, down 2bp from Wednesday's secondary market benchmark, calculated on the bill series expiring on March 7, and down 5bp from the average auction yield of the bills two weeks earlier. Despite the increased sale, the range of accepted yields narrowed to between 5.92% and 5.94% from 5.90%-5.99% at the previous auction.
The bill auctioned will become the reference series, on which the twelve-month benchmark yield is calculated, on May 4.
AKK sold HUF 7.5 billion of the 2015/B bonds, raising its original offer by HUF 2.5 billion after dealers bid for HUF 14.9 billion almost HUF 10 billion less than at the previous auction of the bills on March 31. The average auction price still rose to 96.67% from 96.5% at the previous auction.
AKK auctions twelve-month bills bi-weekly on Thursday, and also offers a floating-rate bond parallel with the twelve-month bills at every second auction.