Banks demand higher yields, gov’t says no

Bureau of the Treasury (From the Facebook account of the bureau)

The government rejected all bids for 3.5-year Treasury bonds at Tuesday’s auction as lenders asked for interest rates that are too high amid expectations of more rate hikes by central banks both here and the influential ones abroad.

“The demand [for government securities is] still good but the [tendered] rates provided excessive buffer [as investors are] anticipating hawkish rhetoric from the United States Federal Reserve and expecting that the Monetary Board [at the Bangko Sentral ng Pilipinas] may continue higher rate hikes,” National Treasurer Rosalia de Leon told reporters.

The Bureau of the Treasury (BTr) sought to raise a total of P35 billion from the re-issuance of T-bonds that were first made available last Aug. 4 at a coupon rate of 5.25 percent.

On Tuesday, the auction committee decided to not accept any bid, even as investors were ready with P40.73 billion in funds.

The buyers asked for as low as the coupon rate and as much as 6 percent.

If the committee fully awarded the P35-billion offer, the yield on the T-bonds would have averaged at 5.592 percent.

In turn, that average would have been higher than prevailing secondary market rates of 5.203 percent for three-year bonds and 5.455 percent for four-year bonds.

This latest T-bond offering was part of a P200-billion domestic borrowing program that the BTr has slated for September. INQ