Treasury raises P35B via sale of reissued bonds

The Bureau of the Treasury (BTr) on Tuesday raised P35 billion through the sale of reissued 25-year bonds, making long-term IOUs a likely mainstay in next month’s domestic borrowings plan.

The BTr also opened its tap facility window for the 11 government securities eligible dealers (GSEDs)-market makers to raise another P10 billion from the reissued bonds with remaining life of 13 years and four months.

These treasury bonds were awarded at 6.894 percent, below the original coupon of 8.125 percent in 2010, and the prevailing secondary market rates of 6.922-6.982 percent.

GSEDs were willing to lend the BTr a total of P93.9 billion, or 2.7 times more than the amount programmed for borrowing.

“We saw a repeat of strong interest in the long-end, with attraction of yield pick-up. The rate was lower than the secondaries, and the market did not ask for any maturity or illiquidity premium,” National Treasurer Rosalia de Leon said.

To date, the BTr raised a total of P198.2 billion from this bond series.

As local creditors recently preferred longer tenors, De Leon said the domestic borrowing program for August “will include long tenors given [Tuesday’s] auction results.”

The schedule for next month’s T-bill and bond auctions will be out this week.