Hungary state debt manager increases T-bond float on high demand.

By bne IntelliNews September 10, 2010
The demand for Hungarian government bonds recovered at the latest primary auction, the State Debt Management Agency (AKK) informed. It floated HUF 70bn (EUR 244mn) worth of bonds with three-, five- and ten-year maturity periods, including HUF 10bn in additional three- and HUF 5bn in five- and ten-year bond issues. AKK sold HUF 30bn in three-year bonds, HUF 20bn in five-year bonds and HUF 20bn in ten-year bonds. Also, AKK sold another HUF 25.3bn of the three-, five-and ten-year bonds at a non-competitive procedure, thus placing the full issue. The total investor bids at the auction amounted to HUF 194.3bn, providing a 3.9 coverage ratio against the original supply, reaching a record high level this year. Subscription recovered from the latest primary auction couple of weeks ago, when the coverage ratio was at 1.8. Investors' demand has been pushed up by the cabinet announcement for notable consolidation of the fiscal position next year. The average yield for all bonds decreased from the respective secondary market benchmarks, reaching 7.18% for the three-year bond, 7.21% for the five-year bond and 7.35% for the ten-year bond. However, yields were still above the rates at the previous auction.

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