Treasury awards P25 billion reissued T-bonds in full

MANILA, Philippines — The government yesterday borrowed P25 billion in long-term securities even as investors asked for higher rates.

The Bureau of the Treasury fully awarded P25 billion of the reissued 20-year T-bonds with a remaining life of 14 years and eight months.

During yesterday’s auction, the 15-year T-bonds fetched an average rate of 6.085 percent, moving up by 10.1 basis points from the 5.984 percent BVAL Reference Rate, which is the standard for securities.

Rates went from a low of 5.98 percent and a high of 6.18 percent.

Yields demanded by investors were higher in anticipation of the next move of the US Federal Reserve as well as the Bangko Sentral ng Pilipinas this month.

Nonetheless, yesterday’s average rate was lower than the 6.5 percent coupon rate when the T-bonds were first issued in February 2018.

Likewise, the yield was significantly below the 7.565 percent rate during the closest 16-year T-bond auction on Sept. 28, 2022.

The government rejected all bids at the time and did not raise its target P35 billion.

Demand for yesterday’s securities attracted P51.705 billion bids, oversubscribing the auction by 2.07 times.

Bids inched up by 3.4 percent from the closest 16-year auction where offers reached P49.985 billion.

The latest offering has a maturity date of Feb. 22, 2038.

For June, the Treasury targets to raise P185 billion from the debt market. A total of P125 billion is targeted to be borrowed from long-term debt papers.

The Treasury has so far raised P75 billion.