Bigger Q2 panda bond sale seen

The government plans to sell a bigger volume and possibly multiple tenors of renminbi-denominated panda bonds in China by the second quarter, National Treasurer Rosalia V. de Leon said Monday.

The Philippines’ second foray into the panda market will also tap the bond direct facility, which De Leon said would allow offshore investors to invest in the onshore renminbi market.

The country would be the first in the region to tap the bond direct facility, De Leon told reporters in an interview after the Treasury bills auction.

According to De Leon, they were eyeing to sell panda bonds worth $300-500 million, or more than the $230-million worth issued last year.

In March last year, 1.46 billion renminbi (about P12 billion) in three-year panda bonds were sold by the Philippine government for the first time in China at a yield of 5 percent.

This year, the government may issue the panda bonds in tenors of three, five and seven years. “If the volume is bigger, we might consider a multi-tranche [issuance],” De Leon said.

Meanwhile, the Treasury sold all the P20 billion in Treasury bills it offered Monday as rates fell across the board.

The Treasury awarded P6 billion in the benchmark 91-day debt paper at 5.484 percent; P6 billion in 182-day at 5.867 percent; and P8 billion in 364-day at 5.924 percent.

Total tenders across the three tenors reached P33.7 billion, making the auction over 1.5 times oversubscribed. —BEN O. DE VERA