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Hungary central bank buys HUF 3.4 bln of six series mortgage bonds at tender

The National Bank of Hungary (MNB) accepted HUF 3.4 billion of the HUF 36.1 billion selling offers it received for the sale of mortgage bond series at its seventh secondary-market purchase tender.

Demand for selling the bonds rose but actual sales fell compared to the previous tender held on July 7 where the MNB bought HUF 8.2 billion of five mortgage bonds series after receiving selling offers for HUF 15.7 billion.

The MNB received offers for ten series of which it purchased six series.

The MNB offered to buy 12 varying series of mortgage bonds, three of which were issued by Unicredit Jelzálogbank, five of them by FHB Bank and the remaining four by OTP Bank mortgage unit. The bonds maturity varies between 2011 and 2014.

The MNB bought HUF 350m of an OTP bond maturing in 2011 at an average yield of 6.90%, it bought HUF 275 million FHB bond maturing in 2013 at 7.20% and HUF 420 million of another tranche of the same mortgage bond at 7.30%. It purchased HUF 1 billion of an OTP bond and HUF 900 million of an Unicredit Jelzálogbank bond, both due in 2014 at an identical yield of 7.30%. It also bought HUF 498 million of an FHB bond due in 2014 at a yield of 7.56%.

The bank refused selling offers for bonds due next year made at 6.10% and 6.20% and an offer to sell a bond expiring in 2013 at yields between 7.00% and 7.10%.

The tender yields compare to a one-year secondary market government securities benchmark yield of 5.45% and a three-year secondary market benchmark yield (calculated for a bond maturing in 2014) of 6.41 on Wednesday.

The MNB said it would hold its next secondary-market purchase tender on September 15.

The tenders are part of a HUF 100 billion forint mortgage bond purchase program to prop up market liquidity and thereby forint lending announced by the MNB early in February.

The MNB has purchased HUF 5.3 billion in mortgage bonds on the primary market (all in one five-year FHB bond series) and HUF 21.6 billion in mortgage bonds on the secondary market and purchased to date under the program. (MTI – Econews)