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Demand moderate, yield up from benchmark at Hungary gov't bond auction

Hungary's Government Debt Management Agency (AKK) sold HUF 50 billion of three-, five- and ten-year bonds at an auction on Thursday, the announced volume. Demand dropped compared to the previous two auctions, and average yields exceeded Wednesday's respective benchmarks, although, mirroring a drop of secondary market yields in the past two weeks, were still sharply down from the last auction.

Subscription for the three bonds totaled HUF 87.6 billion, well down from HUF 127.7 billion at the previous auction on September 23. AKK sold HUF 55 billion bonds at the September 23 auction, raising five-year bond sales by HUF 5 billion. It sold another HUF 1.3 billion of the three-year bonds at the non-competitive tender following the auction.

On Thursday AKK sold the announced HUF 20 billion of the 2014/C series bonds. Bids for the papers came to HUF 38.8 billion, down from HUF 51.1 billion two weeks earlier. Average yield was 6.38%, 11bp over the secondary market benchmark set on Wednesday but still 40bp below the yield at the previous auction of the bonds two weeks earlier.

AKK sold HUF 15 billion of five-year 2016/C bonds, the announced amount after primary dealers submitted bids for HUF 28.0 billion, compared to their HUF 42.2 billion bids two weeks earlier. Average yield was 6.51%, 15bp above the respective secondary market benchmark and 31bp below the average yield at the previous auction.

The debt manager sold HUF 15 billion of ten-year bonds, the original offer after receiving bids for HUF 20.8 billion. Bids for the bonds totalled HUF 34.7 billion at the September 23 auction. Thursday's average auction yield for the bonds was 6.66%, 10bp over the latest ten-year secondary market benchmark but 27bp lower than the average auction yield two weeks earlier. (MTI-Econews)