Hungary’s Government Debt Management Agency (ÁKK) allotted 75 billion forints worth of government bonds instead of the originally planned HUF 50 bn at its first bond auctions of 2018 on Thursday. The average yields have also fallen to new all-time lows. The yield on the 10-year benchmark paper has never been under 2.0%, for instance.
The ÁKK has received HUF 69.7 bn worth of bids from primary dealers on a HUF 15 bn lot of 3-year bonds. The maximum 50% raise let to a HUF 22.5 bn allotment in this segment. The average yield was set to 0.5%, down 8 basis points compared to the previous auction of this instrument in early December, and 2 bps below the benchmark fixing on the secondary market on Wednesday.
A HUF 10 bn lot of 5-yr bond attracted HUF 53.4 bn in bids, as a response to which the debt manager allotted the maximum allowed HFU 30 bn. The average yield came in at 1.06%, down 1 bp compared to the previous auction and 4 bps below yesterday’s benchmark fixing. The average yield is also merely 2 bps from the all-time low.
A HUF 15 bn lot of 10-yr bond attracted HFU 56.4 bn in bids from primary dealers. The ÁKK has allotted the maximum allowed amount (HUF 22.5 bn), at an average yield of 1.96%, which is 8 bps lower than at the previous auction of the instrument at the end of November and 7 bps below the benchmark fixing on Wednesday. It is also a new all-time low, as the yield has never been south of 2.0% before.
Overall, the debt manager sold HUF 75 bn worth of bonds today instead of the planned HUF 50 bn at high demand and lower yields. Additional allotments can be expected at the non-competitive tenders in the afternoon.
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