Hungary cuts bonds’ offer at latest auction on weak demand.

By bne IntelliNews September 20, 2013

The Hungarian state debt manger AKK sold a combined HUF 29.9bn (EUR 101mn) in three-, five- and 15-year fixed-rate bonds at an auction on September 19, cutting the initial offer by HUF 14.1bn on weak demand, the agency informed. Investors’ bids totalled HUF 39.7bn, sharply down from HUF 78.1bn at the previous auction held a couple of weeks ago.

AKK sold HUF 12.5bn worth of three-year bonds on September 19, down from HUF 20bn initially planned. The issue was undersubscribed as demand dropped to HUF 15.6bn from HUF 25.5bn at the previous auction. Despite this, the average yield at the latest auction reached 4.55%, down by 65bps from the previous tender and 20bpt under the benchmark fixing.

AKK sold HUF 15bn of five-year bonds, in line with the announced volume. Investors’ bids totaled HUF 21.7bn, up from HUF 16bn at the previous auction. The yield averaged 5.05%, down by 79bpt from the previous tender and 33bps under the secondary market benchmark.

The state debt authority also placed HUF 2.36bn in 15-year bonds, again cutting the initially planned lot by HUF 6.6bn. The average yield stood at 6.21%, up by 30bps from the secondary benchmark and up by 55bps from the previous auction, which was held in April 2013.

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