Gov’t rejects all bids for 15-year T-bondsBy Ronnel W. Domingo
Philippine Daily Inquirer
The government on Tuesday rejected all tenders for P9 billion worth of 15-year treasury bonds amid what National Treasurer Roberto B. Tan described as an apparent disinterest among investors.
In an interview, Tan said the auction committee decided to reject all bids and did not consider a partial award because the P9-billion offering was undersubscribed, with prospective buyers bidding for only P7.56 billion.
During the auction, banks submitted high bids, which ranged from 6.376 percent to 6.750 percent.
“We don’t want to send any signal that (the government is) in need of cash,” he said. “(Of course,) we’d like to provide adequate supply (of debt paper) but at the right price.”
The results of the bidding Tuesday showed a “sign of apparent disinterest on the part of many investors,” Tan said. “This may be another waiting game (and) fence-sitting).”
The Treasury chief said the global financial situation, in view of the prevailing debt worries in Europe, prompted investors to watch external factors that might affect the country.
“On the domestic front, I think things are quite clear,” Tan said. “We posted a budget surplus in April and there is a lot of liquidity in the market.”
He added that investors might not have been interested in the 15-year bond because such tenor was not yet an established issue.
“It may be the illiquid nature of the bond,” Tan said. “The outstanding (15-year paper) is quite low in volume.”
The last time the Bureau of Treasury issued 15-year securities was in February in the form of retail T-bonds that fetched a coupon of 5.375 percent.
Had the government accepted all of the P7.56 billion tendered Tuesday, the yield would have gone up by 70.7 basis points to 6.082 percent.
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