Treasury sells P25B worth of reissued T-bonds

THE GOVERNMENT sold P25 billion worth of reissued 20-year treasury bonds at a lower rate to investors that flocked Tuesday’s auction.

The IOUs, maturing in March 2033 and which translates to 18.2 years in remaining life, were auctioned off by the Bureau of the Treasury (BTr) at an average rate of 3.855 percent, down by 124 basis points from 5.095 percent during the auction of the same bonds last September.

In a statement, the BTr said the average rates “settled below secondary market trading levels amid healthy demand for long tenor debt securities.”

The treasury bonds attracted P73.457 billion in tenders, almost three times oversubscribed.

In contrast, the BTr rejected all bids for a total of P20 billion in short tenor treasury bills two weeks ago, as investors’ bid rates were “way above where they should be.”

Finance Undersecretary Gil S. Beltran told reporters after the auction that the strong interest among investors in long tenor debt paper reflected a “very stable economy,” both locally and globally.

“The world economy is getting a little better. The financial markets are calmer this time than in September last year, when there were QE (quantitative easing) tapering tantrums,” said Beltran, who chaired Tuesday’s auction.

On the domestic front, the country’s robust economy made it a “darling” among investors in government securities, Beltran said.
“The Philippines has become an investment haven because of the returns—the profitability is high, and the market is growing fast.”

For the first quarter of 2015, the BTr is scheduled to auction off P135 billion worth of debt paper, including P75 billion in treasury bonds with tenors of 20 years, 10 years and seven years.