BTr cancels Oct 9 auction of 5-yr T-bonds

MANILA, Philippines - The Bureau of the Treasury (BTr) has cancelled the scheduled Oct. 9 auction of five-year Treasury bonds (T-bonds) to give way to a planned retail Treasury bond (T-bond) sale, the Treasury said in a notice to dealers yesterday.

In its notice, the Treasury said it would issue P30 billion worth of 25-year RTBs in a rate-setting auction on Oct. 9. It has invited dealers to participate by submitting their bids on the auction date.

The retail papers will be offered to the public from Oct. 9 to 22 while the issue date is on Oct. 24, the Treasury also said.

The government has tapped the Land Bank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP) as joint issue managers for the transaction.

Co-issue managers are First Metro Investment Corp., Rizal Commercial Banking Corp., the Philippine National Bank, Deutsche Bank, BDO Capital and Metropolitan Bank & Trust Co.

While the minimum issue size is P30 billion, the government expects to sell more as demand for RTBs has been steadily growing in recent years.

Treasury officials said that as seen in the February RTB debt sale of 15-year and 20-year bonds, investors are already starting to feel comfortable parking their funds in long-term debt knowing they can sell this anytime in the secondary market. The government sold P179.9-billion worth of RTBs in February.

Aside from retail investors, RTBs are also attracting institutional investors who want safe havens for their investments.

RTBs are debt papers issued by the government for as low as P5,000. These instruments are ideal options for retail investors who want to park their funds in government debt papers.

After the planned RTB sale, the government will embark on a domestic debt exchange as part of its debt liability management strategy in November.

Under the plan, the government will exchange outstanding shorter-dated debt in the market with longer-dated papers.

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