Cheaper T-bonds sold

The government yesterday sold cheaper 25-year treasury bonds (T-bonds) with a coupon rate of 8.0 percent, 117.1 basis points lower than the previous average rate of 9.171 percent, marking its last auction of local debt papers in the third quarter.

Buyers, mostly insurance companies and other financial institutions, swamped the auction with tenders reaching P22.246 billion against an offer of only P8.5 billion, which made it oversubscribed more than twice.

The Bureau of the Treasury (BTr) awarded only P8.5 billion as planned and rejected going to the tap facility to upsize the offer.

“We have enough cash. We don’t think we should resort to the tap facility,” National Treasurer Roberto Tan said in an interview after the lacklustre auction that took only a few minutes to be over.

A tap facility is resorted to by selling over-the-counter of more securities to take advantage of the extra-ordinary volume of bids during an auction.

Tan said the market continues to be liquid and is unleashing its cash into the domestic debt market.

He said for instance, this week, a total of P48.375 billion of short and long-term securities are maturing, which are expected to be ploughed back into the local market.

Tan said a neutral policy stance in both global and domestic fronts has likewise fuelled the positive demand for longer-dated debt papers.

“Market continues to be liquid. Inflation seems to be very tame,” Tan said.  Dino Ng


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