Hungary's Government Debt Management Agency (ÁKK) plans net repayments of HUF 72 billion in April-June, with HUF 1,332 billion issues against HUF 1,404 billion repayments in the period, ÁKK's fresh three-month forint issue plan revealed.
There will be one large bond expiry and two big discount T-bill expiries, and the volume offered at fixed-rate bond auctions will rise steadily to HUF 50 billion, the issue plan shows. Volume offered at T-bill auctions during the period will remain the same. In a change, ÁKK plans no reverse bond auctions in Q2.
The longest, 15-year fixed-rate bond is scheduled to be offered once, on April 21. The floating-rate bonds will be offered three times, on March 31, April 28 and May 26.
ÁKK plans net HUF 15 billion in T-bill repayments, including net three-month T-bill issues of HUF 20 billion, and HUF 57 billion in net bond repayment in April-June.
The net forint repayment plan comes after planned net issuance of HUF 233 billion in March-May, suggesting that the debt manager does not expect the high deficits seen in January and February to continue over the second quarter, and it expects only limited need for further bridge financing until the transfer of assets from private pension funds as members return to the state pension system. The transfer of the assets is set to take place by June 12, according to the timeframe in recent legislation. About HUF 530 billion of the pension fund assets will go toward current expenditures in the 2011 budget.
ÁKK plans to sell a combined HUF 360 billion of bonds at the six bi-weekly fixed-rate auctions and two five-year floating-rate bond auctions planned for the period. ÁKK is likely raising its fixed-rate bond auction offer to HUF 50 billion from HUF 45 billion at recent auctions (with the exception of HUF 50 billion offered at an auction on February 10). It will likely continue to offer HUF 5 billion per auction of the 2015/B floating-rate bonds, auctioned once a month, parallel with every second twelve-month discount T-bill auction, since October 14.
Recent primary bond sales has exceeded the original offer with large oversubscription at the auctions and additional sales at non-competitive tenders following the auctions.
There will be just one big bond expiry in April-June: the HUF 416 billion redemption of 2011/C bonds on April 22.
ÁKK plans to auction HUF 650 billion of three-month discount T-bills at the 13 auctions as against HUF 630 billion in expiries in the period. In March-May ÁKK planned net three-month T-bill issues of HUF 145 billion.
The per-auction offer of three-month discount T-bills matches the HUF 50 billion offered at the weekly three-month bill auctions at present. ÁKK raised its auction offer from HUF 40 billion to HUF 45 billion in January, and it raised it to HUF 50 billion on February 22.
ÁKK plans to sell HUF 300 billion of twelve-month discount T-bills at six auctions in April-June, under the HUF 335 billion in expiries, one of HUF 160 billion of T-bills on April 6 and the other of HUF 175 billion on June 1. The debt manager will continue to offer HUF 50 billion of the bills per auction as it has done since the start of the year.
ÁKK plans to sell HUF 22.4 billion of twelve-month interest-bearing T-bills during the period. As usual, the sales target of the bills, designed for retail investors, matches the expiring volume.