Hungary's Government Debt Management Agency (AKK) cut the sale of three-year bonds and sold the announced volumes of five- and ten-year bonds at an auction on Thursday.
Yields rose both compared to the previous auction of the bonds and were more than 10 basis points up from the respective secondary market benchmarks on Wednesday.
Demand for all bonds exceeded the offer but oversubscription was light for the three-year bonds, was moderate for the five-year ones and was over double for the ten-year bonds, last auctioned four weeks earlier. Demand has shifted towards the longer end compared to the previous auction on October 20.
Auction demand has recently dwindled, with AKK cancelling an undersubscribed twelve-month auction last Thursday and cutting its sale of three-month bills on Wednesday.
AKK sold HUF 15bn of three-year bonds, cutting its offer by HUF 5bn after receiving bids for just HUF 23.2bn. Demand fell from HUF 33.3bn at the previous auction on October 20.
Average yield of the bonds was 7.65%, 15bp over the secondary market benchmark and 74bp over the yield at the previous auction two weeks earlier. Yields moved in an unusually wide range between 7.35% and 7.69%.
AKK sold the announced HUF 15bn of five-year bonds, after primary dealers submitted bids for HUF 19.4bn. Subscription rose from HUF 16.9bn at the previous auction of the bonds on October 20.
Average yield for the ten-year bonds was 7.90%, 12bp over the secondary market benchmark, and 59bp over the average auction yield two weeks earlier. Yields ranged between 7.80% and 7.95%.
AKK sold HUF 8bn of 10-year bonds, the original offer after receiving bids for HUF 17.4bn. Demand for the ten-year papers totalled HUF 25.6bn at their last auction on October 6.
Average yield of the bonds was 8.17%, 14bp over the secondary market benchmark and 23bp higher than the yield at the previous auction of the bonds on September 8. Yields ranged between 8.14% and 8.18%.
At the previous fixed-rate bond auction on October 20, AKK cut the sale of five- and 15-year bonds and sold the announced volume three-year bonds at yields above the respective secondary market benchmarks.
The auction came after a moderately oversubscribed three-month discount T-bill auction on Wednesday where AKK less than planned bills at rising yields. Last Thursday the debt manager cancelled an undersubscribed twelve-month discount T-bill auction but sold the announced HUF 5bn five-year floating rate bonds after receiving HUF 7.2bn bids.