Yields on Hungary’s bonds drop at latest auction on healthy demand.

By bne IntelliNews December 13, 2013

The Hungarian state debt manger AKK sold a combined HUF 40bn (EUR 131.8mn) in three-, five- and ten-year fixed-rate bonds at an auction on December 12, in line with the initial offer, the agency said in a statement. Investors’ bids totalled HUF 105.3bn, down from HUF 119.6bn at the previous auction held a couple of weeks ago, when it raised the initial offer by HUF 9bn.

AKK sold the planned volume of HUF 18bn of three-year bonds on December 12. The issue lured bids of HUF 50.7bn, providing a relatively healthy coverage over the supply. Demand rose from HUF 40.7bn at the previous auction. The average yield at the latest auction reached 4.09%, down by 3bps from the previous tender and 3bps under the secondary benchmark fixing.

AKK floated HUF 13bn in five-year bonds as initially announced. Demand dropped to HUF 35.9bn from HUF 42.4bn at the previous auction. The average yield stood at 4.77%, which was 4bps under the secondary market benchmark and 19bps below the yield at the previous tender.

The state debt authority placed HUF 9bn in ten-year bonds. Investors’ bids came in at HUF 18.7bn, down from HUF 36.5bn at the previous tender. The average yield stood at 5.79%, decreasing by 19pps from the previous auction and in line with the secondary benchmark fixing.

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