Hungary’s Government Debt Management Agency (ÁKK) has on Thursday put the largest lot of 12-month discount Treasury Bill up for auction in nearly a year, but due to muted demand it did not manage to allot as much as it wanted to. The issuer had greater luck with the floating-rate bond where a HUF 7 bn lot was scooped up.
The process we have seen over the last few weeks continued at today’s auction. The debt manager raised the offered lot further but at such depressed yield levels investors were not enticed. The ÁKK placed a HUF 40 bn lot of 12-m T-bills up for auction, which is the largest amount offered since the end of December 2016. The usual lots on offer at the previous auctions were HUF 15-20 bn therefore today’s lot marks a major raise. That is part of the reason why the auction was not a success and only HUF 29.8 bn worth of bids were submitted by primary dealers, of which HUF 25 bn were accepted. The average yield, however, was up at 0.03% from -0.02% two weeks ago. And now the lowest accepted yield was no longer zero; accepted yields were in a range between 0% and 0.05%.
The auction of the 5-year floating-rate bond was more successful. A HUF 7 bn lot attracted HUF 14.2 bn worth of bids, and the ÁKK allotted the original lot on offer.
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