Treasury sells P15B in T-bonds

The Bureau of the Treasury yesterday awarded all P15 billion in reissued 10-year T-bonds amid robust demand.

Investors tendered a total of P29.49 billion for the treasury bonds maturing on May 4, 2027, making the auction oversubscribed by almost twice.

The T-bonds were awarded at an annual rate of 4.692 percent, down 6.7 basis points from 4.759 percent during the previous auction.

In a statement, the Treasury said the IOUs were reissued at an average rate “well within internal estimates.”

The Treasury said it made a full award on the back of strong market demand.

National Treasurer Rosalia V. De Leon told reporters after the auction that there was market appetite on the long end of the curve, especially from institutional investors.

The lower rate, meanwhile, was attributed by De Leon to a “very benign” and “very manageable” inflation environment, citing that headline inflation eased to a four-month low of 3.1 percent in May.

As for the government’s planned issuance of panda bonds, De Leon said they were still monitoring what was going on in the panda market because, if ever, it would be the country’s maiden foray into the panda market “so we still have to understand the process and the approvals required.”

Last month, De Leon told the Inquirer that the Treasury was still learning about the panda market.

“We have to also make sure pricing is competitive with other possible issuances,” De Leon had said.

Panda bonds are yuan-denominated debt paper issued in China by foreign governments or companies.

In April, Finance Secretary Carlos Dominguez III said the government planned to issue at least $200 million in panda bonds during the third or fourth quarter.

Dominguez had said they were looking at tenors of three and five years. —BEN O. DE VERA AND FRANCES JOSEPHINE ESPESO