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Investors show strong interest in longest term at bond auction

Primary dealers showed strong interest in the longest term at a bond auction on Thursday, prompting the Government Debt Management Agency (AKK) to raise its original offer.

AKK sold HUF 12.5 billion of ten-year bonds at the auction, raising its original offer by HUF 2.5 billion after primary dealers submitted bids for HUF 26.0 billion.

Average yield on the bonds was 7.39%, 2bp over the secondary market benchmark and 11bp higher than the yield at the previous auction two weeks earlier.

AKK sold the announced amounts of three- and five-year bonds at the auction.

It sold HUF 20 billion of the three-year bonds. Offers came to HUF 38.9 billion. Average yield was 6.72%, 3bp over the benchmark and 6bp higher than the yield two weeks earlier. Yields ranged between 6.67% and 6.74%.

AKK sold HUF 15 billion of the five-year bonds. Bids were HUF 22.2 billion. Average yield was 6.85%, 2bp over the benchmark and 4bp higher than the yield at the previous auction. Yields ranged between 6.79% and 6.87%.