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Hungary debt manager plans net forint issuance of HUF 233 bln in March-May

Hungary's Government Debt Management Agency (ÁKK) plans HUF 233 billion net issuance - all in discount T-bills - in March-May, with one large bond expiry and an unchanged schedule of bond auctions, ÁKK's fresh three-month forint issue plan revealed.

Net issues are scheduled at HUF 233 billion, including HUF 335 billion in net discount T-bill issues and HUF 102 billion in net bond repayment.

HUF 145 billion of the net issuance planned in the period is of three-month discount T-bills as the debt manager plans to secure bridging financing until the transfer of assets from private pension funds as members return to the state pension system. About HUF 530 billion of the pension fund assets will go toward current expenditures, according to the 2011 budget.

Hungarian private pension fund members had until the end of January to opt out of a move, together with the assets, back to the state pension pillar.

ÁKK plans to sell a combined HUF 320 billion of bonds at the six bi-weekly fixed-rate auctions and four five-year floating-rate bond auctions planned for the period, unchanged from the volume planned for the first quarter. ÁKK raised its fixed-rate bond auction offer from HUF 45 billion to HUF 50 billion at the previous auction held on February 10. The 2015/B floating-rate bonds has been auctioned once a month, parallel with every second twelve-month discount T-bill auction, since October 14.

ÁKK plans no sales of 15-year bonds in March-May. The next 15-year bond auction will take place on February 24.

There will be just one big bond expiry in March-May: the HUF 406.2 billion redemption of 2011/C bonds on April 22.

Total bond redemptions planned in the period include HUF 15 billion in early purchases at two reverse auctions, scheduled for March 9 and March 23.

ÁKK plans to sell HUF 350 billion of twelve-month discount T-bills at seven auctions during the three-month period, compared to one expiry, of HUF 160 billion bills, on April 6. The debt manager will continue to offer HUF 50 billion of the bills at each auction. The offer was raised from HUF 40 billion during the period between the end of November and the end of December.

ÁKK plans to auction HUF 700 billion of three-month discount T-bills against HUF 555 billion of expiries in March-May. The per-auction offer matches the HUF 45 billion of bills offered at auctions at present. ÁKK offered HUF 40 billion of the bills at weekly auctions between September and early January.

ÁKK plans to sell HUF 25.2 billion of one-year interest-bearing T-bills during the period. As usual, the sales target of the bills, designed for retail investors, matches the expiring volume.