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ÁKK buys back HUF 11.4 bln in bonds in reverse auction

Hungary's Government Debt Management Agency (ÁKK) bought back a combined HUF 11.4 billion worth of two-year bonds expiring next year before maturity, most of it in 2012/C bonds, at a reverse auction on Wednesday.

The larger part of the HUF 28.2 billion offers and the bulk of the accepted ones were for the early resale of 2012/C bonds, offered for early repurchase by the ÁKK for the first time. The ÁKK refused almost all the offers made for the early resale of 2012/B bonds.

The ÁKK sold only HUF 300 million of 2012/B bonds, turning down most of the HUF 12.4 billion offers. The average repurchase yield was 5.85%, up 3 basis points from the twelve-month secondary market benchmark on Tuesday, and up 4bp from the previous repurchase of the bonds on July 13.

2012/B bonds were first offered in October 2006, they will expire on June 12, 2012, and they bear a 7.25% coupon. The repurchase will leave on the market HUF 357 billion of the series, Econews calculated based on ÁKK figures for June 30.

The debt manager accepted HUF 11.1 billion of the HUF 15.8 billion offers it received for the 2012/C bonds. The average repurchase yield was 5.80%.

2012/C bonds were first issued in August 2007, will expire on October 24, 2012, and bear 6.00% annual coupon.

The repurchase will cut the outstanding stock to about HUF 388 billion.

The auction was the 11th reverse auction held this year, and raised the volume bought back at this year's reverse auctions to HUF 116 billion, Econews calculated.