The coupon rate on five-year treasury bonds on Tuesday eased to 2.125 percent, falling by 200 basis points from the 4.125 percent set during the previous auction.
Also, Tuesday’s auction resulted in an average of 2.052 percent, which was half the previous average of 4.104 percent.
The latest coupon rate is 42.5 basis points lower than the corresponding 2.55 percent for done deals at the secondary market.
Tuesday’s offer was a fresh issue of five-year bonds that would mature on May 23, 2018.
The government raised P30 billion as planned. Investors tendered a total of P57.921 billion—almost double the offered volume.
National Treasurer Rosalia V. de Leon said in an interview the result confirmed investor’s interest in the five-year debt paper.
De Leon predicted that fund managers would turn to T-bonds since the Bangko Sentral ng Pilipinas restricted banks’ access to its special deposit account.
Asked whether the Bureau of Treasury would accommodate more investors, De Leon said that there was no need since the government already has enough cash for its requirements.
“We have so much cash, the liquidity is bottomless,” she said.