Gov’t sells retail bonds to individuals first, bringing P149B from small investors

The Bureau of the Treasury on Tuesday (Jan. 28) sold an initial P134 billion in three-year retail treasury bonds (RTB), securities available to small investors, at a coupon of 4.375 percent and will swap at least P15 billion per day for the outstanding RTBs maturing in April.

Tenders for the government’s 23rd and the Duterte administration’s sixth RTB issuance reached P149.8 billion, making the auction almost five times oversubscribed the initial offer of P30 billion.

The RTBs were made available to small investors starting Tuesday in minimum denominations of P5,000.

The offer period will end on Feb. 6.

Settlement will be on Feb. 11, hence the bonds will mature on Feb. 11, 2023.

Amid flushing liquidity in the system, National Treasurer Rosalia V. de Leon said it was possible that the new money to be raised from this latest RTB issuance would breach the record P255.4 billion sold in 2017.

“We have preference for the individuals, so we want to see first if there would be bigger allocation going to individuals before we allocate to institutions,” De Leon said.

On the switch program, De Leon said bond holders of three-year RTBs maturing on April 11, 2020 will be allowed to exchange their holdings “to provide a convenient reinvestment option at no cost” since there will be no broker’s fee.

De Leon said the P15-billion daily cap for the swap will be implemented during the eight working days of the offer even as “we [the Treasury] reserve the right how much we will accept, so we can also upsize in the same manner that we upsized in our auction today.”

The maturing RTBs in April amounted to P180 billion.

De Leon said proceeds from the RTB issuance will finance the government’s budgetary requirements.

For this RTB offering, state-run Development Bank of the Philippines (DBP) and Land Bank of the Philippines (Landbank) were the joint lead issue managers.

The joint issue managers included BDO Capital and Investment Corp., BPI Capital Corp., China Bank Capital Corp., First Metro Investment Corp., PNB Capital and Investment Corp., RCBC Capital Corp., and SB Capital Investment Corp.

The RTBs will be sold online by DBP, Landbank, and First Metro Securities Brokerage Corp.

The other selling agents that will make the RTBs available over-the-counter included Banco De Oro Unibank Inc., China Banking Corp., Citibank N.A., CTBC Bank (Philippines) Corp., East West Banking Corp., ING Bank, Maybank Philippines Inc., Metropolitan Bank and Trust Co., Philippine Bank of Communications, Philippine National Bank, Rizal Commercial Banking Corp., Robinsons Bank Corp., Security Bank Corp., Standard Chartered Bank, and Union Bank of the Philippines.

The BTr will also hold roadshows for the RTB sale in the cities of Baguio, Cebu and Davao on Jan. 29; Bacolod City, Clark Freeport, and General Santos City on Jan. 30; as well as Cagayan de Oro and Iloilo cities on Jan. 31.

Edited by TSB