Treasury awards P10B in 10-year bonds

Citing strong market demand, the Bureau of the Treasury on Tuesday fully awarded P10 billion in reissued treasury bonds with a tenor of 10 years.

With an average rate of 6.213 percent, 3.7 basis points lower than the previous 6.25-percent coupon rate marked for the original issue, all 10-year bonds sold by the Treasury have a remaining life of 9 years and 11 months and will mature on March 22, 2028.

Total amount of tenders made reached P17.28 billion. The yield was also well within the Treasury’s expectations.

To date, the outstanding volume for this series of government securities amounted to P17.99 billion.

Meanwhile, the Treasury on Monday only partially awarded the bills it offered as the market preferred the 91-day debt paper due to uncertainties mostly caused by developments abroad.

The Treasury accepted P5 billion in three-month IOUs offered at 3.493 percent as tenders reached P11.527 billion.

In a statement, the Treasury said the yield for the 91-day bills was “backed by strong demand from participating banks.”

The 182- and 364-day treasury bills were undersubscribed as the bids of P3.33 billion and P3.435 billion, respectively, fell short of the offers worth P4 billion and P6 billion.

The Treasury awarded only P2.08 billion in six-month debt paper at 3.684 percent and P1.74 billion in one-year government securities at 3.83 percent.

In all, the Treasury accepted P8.82 billion in bills out of the P18.29 billion in total tenders.

“The offers came in at the shortest tenor—basically our GSEDs (government securities eligible dealers) are favoring the shortest tenor on issue. Basically, we think that it’s about the hawkish stance of the Fed as well as the minutes have gone out last week—there are reportedly three rate hike cycles still on the table,” Deputy Treasurer Erwin D. Sta. Ana explained to reporters after the auction on Monday.

Also, “there’s a new development in geopolitical perspective in Syria so the market is also factoring that, and also the inflation picture domestically,” Sta. Ana added.