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Demand strong, yields at benchmarks at Hungary gov't bond auction

Hungary's Government Debt Management Agency (ÁKK) sold HUF 60 billion of three-, five- and ten-year bonds at an auction on Thursday, raising five- and ten-year bond sales by HUF 5-5 billion from the the announced volume. Demand was up from a moderate level two weeks earlier. Average yields were practically at Wednesday's respective benchmarks, while rose from the previous auction, following a rise of secondary market yields over the past two weeks.

Subcription for the three bonds totalled a healthy HUF 139.8 billion, well up from HUF 87.6 billion at the previous auction on October 7. ÁKK sold HUF 50 billion bonds at the October 7 auction and sold another HUF 0.7 billion bonds at the non-competitive tender following the auction.

On Thursday ÁKK sold the announced HUF 20 billion of the 2014/C series bonds. Bids for the papers came to HUF 40.9 billion, slightly up from HUF 38.8 billion two weeks earlier. Average yield was 6.53%, 15bp over the yield at the October 7 auction while level with the secondary market benchmark set on Wednesday.

ÁKK sold HUF 20 billion of five-year 2016/C bonds, raising its sales by HUF 5 billion from the announced amount after bids almost doubled, to HUF 52.5 billion from HUF 28.0 billion two weeks earlier. Average yield was 6.81%, 30bp over the average yield at the previous auction and down 2bp from the respective secondary market benchmark on Wednesday.

The debt manager sold HUF 20 billion of ten-year bonds, HUF 5 billion more than the original offer after receiving bids totalled HUF 46.4 billion, more than double of the HUF 20.8 billion bids at the previous auction. Thursday's average ten-year auction yield was 7.03%, up 37bp from the average auction yield two weeks earlier, and level with the latest ten-year secondary market benchmark. (MTI-Econews)