Yield on 6-year T-bonds down to 3.458%

MANILA, Philippines - The yield on six-year Treasury bonds (T-bonds) fell during the government’s auction yesterday amid steady, strong demand for safe haven bonds.

The Bureau of the Treasury made a full award of the reissued six-year bonds, raising a total of P25 billion.

The issue attracted P35.3 billion worth of bids or 42 percent higher than the P25 billion on offer.

Interest rate averaged at 3.458 percent, down 4.3 basis points from the previous average rate of 3.501 percent.

The bonds fetched a high of 3.57 percent and a low of 3.35 percent.

The average rate of the accepted bids was also below secondary market trading levels, the BTR said.

The Philippines is considering a local debt swap to create more liquid benchmarks and boost demand for longer-term bonds.

The bond swap is part of the government’s plan to smoothen its debt maturity profile, lengthen the maturity of existing peso-denominated liabilities and boost trading volume.

The size of the debt exchange offer has yet to be firmed up.

Treasury officials said the government may offer a minimum of P50-billion new bonds in exchange for notes that are illiquid.

The Philippines has been taking taking advantage of a global shift by investors to emerging markets to extend its debt maturities.