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MNB bank buys HUF 5.2 bln of four series mortgage bonds at tender

The National Bank of Hungary (MNB) accepted HUF 5.2 billion of the HUF 14.4 billion selling offers it received for the sale of mortgage bond series at its eighth secondary-market purchase tender on Wednesday.

Demand for selling the bonds fell but actual sales rose compared to the previous tender held on August 18 when the MNB bought HUF 3.4 billion of six mortgage bonds series after receiving selling offers for HUF 36.1 billion.

The MNB received offers for seven of the ten series it offered to buy of which it purchased four series. Of the 10 varying series of mortgage bonds the MNB offered to purchase, three were issued by Unicredit Jelzálogbank, three by FHB Bank and the remaining four by OTP Bank mortgage unit. The bonds maturity varies between 2011 and 2014.

The MNB bought HUF 2.313 billion of an OTP mortgage bond maturing in 2012 at an average yield of 7.23%, it bought HUF 388 million of an FHB bond maturing in 2013 at 7.30% while refusing HUF 1.6 billion offers for the same bonds at the same yield, the tender results published by the MNB show. The bank purchased HUF 1 billion of another tranche of the same FHB bond at 7.61% and HUF 1.5 billion of an OTP bond due in 2014 at a yield of 7.50%.

The bank refused selling offers for bonds due next year made at yields between 6.30% and offers made for bonds expiring in 2012 at yields between6.90% and 7.15%.

The tender yields compare to a one-year secondary market government securities benchmark yield of 5.65% and a three-year secondary market benchmark yield (calculated for a bond maturing in 2014) of 6.78 on Wednesday.

The MNB said it would hold its next secondary-market purchase tender on October 20.

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 5.4 billion in mortgage bonds on the primary market (all in one five-year FHB bond series) and HUF 26.8 billion in mortgage bonds on the secondary market and purchased to date under the program. (MTI – Econews)