Yields on Hungarys bonds drop at latest auction.

By bne IntelliNews August 24, 2012
The Hungarian state debt manger AKK sold a combined HUF 47bn (EUR 170mn) worth of three-, five- and fifteen-year fixed-rate bonds at an auction on August 23, raising the initial offer by HUF 2bn, the agency said on its website. Investors demand totalled HUF 104.3bn, down from HUF 151.3bn at the previous auction held a couple of weeks ago when AKK raised the initial float by HUF 22.5bn. On August 23, AKK sold the announced volume of HUF 20bn in three-year bonds. Investors demand dropped sharply to HUF 39.2bn from HUF 61bn at the previous auction. The average yield was 6.67%, down 17bps from the previous auction and 16bps below the secondary market benchmark. The state debt authority placed HUF 22.5bn worth of five-year bonds, raising the initial offer by HUF 7.5bn. Demand grew to HUF 58.9bn from HUF 52.4bn on August 9. The average yield reached 6.97%, also 12bps lower than in the previous tender and 11bps below the level of the benchmark fixing. AKK also floated HUF 4.5bn in fifteen-year bonds, which was only the half of the initial offer as bids came in at HUF 6.2bn. However, the average yield reached 7.34%, by 58bps lower that the yield achieved at the previous auction and 4bps below the secondary benchmark fixing. At the non-competitive tender later in the day, AKK sold a combined HUF 8.5bn in bonds. Yields on the Hungarian bonds eased for a fourth consecutive auction after the IMF and the EU announced they are ready to launch talks with the government on a precautionary financial agreement. The first round of talks on the loan deal took place in the period July 17-25.

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