Hungary raises bond sale on strong demand, yields down.

By bne IntelliNews May 17, 2013

The Hungarian state debt manger AKK sold a combined HUF 67.5bn (EUR 231.6mn) in three-, five- and 10-year fixed-rate bonds at an auction on May 16, raising the initial offer by HUF 22.5bn, the agency said on its website. Subscriptions totalled HUF 194.3bn, providing a relatively strong demand. It was slightly down from HUF 200bn at the previous auction held a couple of weeks ago.

AKK sold HUF 30bn worth of three-year bonds on May 16, raising the initial offer by HUF 10bn. The issue lured bids of HUF 75.8bn, providing almost a four-fold coverage over the initial supply. Demand slightly eased from HUF 78.4bn at the previous auction, when AKK also increased the float by HUF 10bn. The average yield at the latest auction reached 4.37%, down by 22bps from the previous tender and 5bps under the secondary benchmark fixing.

AKK also sold HUF 22.5bn in five-year bonds, by HUF 7.5bn more than initially planned. Demand increased to HUF 71bn. The average yield stood at 4.49%, which was 9bps under the secondary market benchmark and 36bps under that the yield at the previous tender.

The state debt authority placed HUF 15bn in 10-year bonds, rising the initial offer by HUF 5bn. Bids came at HUF 47bn as compared to HUF 56.2bn at the previous auction held a couple of weeks ago. Similarly to the shorter bond issues, the average yield dropped by 36bps from the previous sale to 4.85% and was 12bps below the secondary benchmark fixing.

AKK sold HUF 24bn of the bonds in a non-competitive tender held after the auction.

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