Yields on Hungary’s bonds rise at latest auction as demand weakens.

By bne IntelliNews September 6, 2013

The Hungarian state debt manger AKK sold a combined HUF 39.5bn (EUR 131mn) in three-, five- and 10-year fixed-rate bonds at an auction on September 5, raising the initial offer by HUF 2.5bn, the agency said on its website. Investors’ bids totalled HUF 78.1bn, down from HUF 87.8bn at the previous auction held a couple of weeks ago.

AKK sold HUF 16bn worth of three-year bonds on September 5, in line with the initial offer. The issue lured bids of HUF 25.5bn, providing a relatively healthy coverage over the supply. Demand edged down from HUF 27bn at the previous auction. The average yield at the latest auction reached 5.20%, up by 11bps from the previous tender and 1bpt over the benchmark fixing.

AKK raised the float by HUF 4bn for five-year bonds and sold a total of HUF 16bn. Demand moderated to HUF 37.8bn. The average yield stood at 5.84%, which was 3bps over the secondary market benchmark and 25bps up from the yield at the previous tender.

The state debt authority placed HUF 7.5bn in 10-year bonds, cutting the initial offer by HUF 9bn. Investors’ bids came in at HUF 14.8bn, down from HUF 22.5bn at the previous tender. Similarly to the shorter bond issues, the average yield rose by 24bps from the previous auction to 6.63%, which was also 4bps over the secondary benchmark fixing.

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