Buyers swamp sale of 3-year retail T-bonds

The Bureau of the Treasury on Tuesday sold an initial P134 billion in three-year retail treasury bonds at a coupon of 4.375 percent and will swap at least P15 billion a 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.

National Treasurer Rosalia V. de Leon said it could be 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 a bigger allocation going to individuals before we allocate to institutions,” De Leon said.

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

De Leon said the P15-billion daily cap for the swap would be implemented during the eight working days of the offer.

The maturing RTBs in April amounted to P180 billion.

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

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