Market demands higher rates for reissued T-bonds

The Bureau of the Treasury accepted only some P4.9 billion of the P10 billion worth of reissued seven-year treasury bonds offered yesterday due to high bid rates.

The Treasury capped the annual rate at 5.865 percent, 15.3 basis points higher than the IOU’s yield of 5.712 percent last month.

Tenders totaled P15.007 billion for the debt paper maturing on April 12, 2025, making the auction oversubscribed.

Deputy Treasurer Erwin D. Sta. Ana said that while the demand for treasury bonds was “quite healthy,” the “market nowadays still prefers shorter tenors.”

On Tuesday, the Treasury awarded only P11.24 billion of the P15 billion in T-bills offered as the market still preferred shorter tenors following last week’s interest rate hike by the Bangko Sentral ng Pilipinas.

The Treasury accepted P5 billion in 91-day IOUs at 3.451 percent, as tenders reached P15.086 billion.

It also awarded P4 billion in 182-day debt paper at 3.934 percent, with bids amounting P10.492 billion.

The two shorter tenors were oversubscribed due to “healthy demand,” the Treasury said in a statement.

As for the 364-day treasury bonds, investors tendered only P3.146 billion, falling short of the P6-billion offering. —BEN DE VERA