Demand was little more than the offer and Hungary’s Government Debt Management Agency (ÁKK) refused all the bids it received for exchanging bonds maturing in 2013 for a bond maturing in 2019 on Wednesday. The auction was the second unsuccessful bond exchange auction in a row.
The previous exchange auction held on September 14 was undersubscribed, and ÁKK refused all the bids received.
ÁKK offered HUF 5bn of 2019/A bonds in exchange for 2013/D bonds and another HUF 5bn in exchange of 2013/E bonds. It halved the offer from the previous, undersubscribed exchange auction on September 14, when ÁKK refused all the bids received.
Demand for acquiring 2019/A bonds in exchange of 2013/D bonds totaled HUF 6.5bn and bids for exchanging 2013/E bonds for 2019/A bonds totaled HUF 6.1bn.
The debt manager announced Wednesday morning that it would calculate the 2013/D at a yield of 7.18% when used in payment, and would calculate 2013/E bonds as payment at a 7.27% yield.
The closest, 3-year secondary market benchmark, calculated for 2014/D bonds, was 7.60% on Tuesday.
Demand for the HUF 10bn-10bn of 2020/A bonds offered totaled HUF 4.4bn in exchange for 2013/D bonds and totaled HUF 4.l1bn if paying with 2013/E bonds.
At the last successful exchange auction on August 17, ÁKK sold the announced combined HUF 16bn of 2019/A bonds in exchange of the same two bonds at an average yield of 7.23%. Combined demand at the August 17 auction totaled HUF 39.3bn.