Gov’t takes partial bite of lenders’ pricier offers

The government raised P26.14 billion out of a P35-billion target from the reissue of 25-year Treasury bonds (T-bonds) as the cost of government securities continue to rise above secondary market rates.

With a remaining life of 12 years and 11 months, the T-bonds that were originally issued in September 2010, attracted a total of P46.99 billion of tenders from investors. This was more than thrice the offered volume.

The debt paper fetched an average of 7.887 percent, which was 51.9 basis points (bps) higher than the 4.368 percent for the same T-bonds at the secondary market. It was also 65.4 bps higher than the 7.233 percent for 15-year corporate bonds.

“Demand was decent but bids carried higher rates as buyers are taking their cue from recent statements made by Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla and Finance Secretary Benjamin Diokno about aggressive rate hikes this year,” National Treasurer Rosalia de Leon told reporters.

Both have hinted that the BSP policy rate hike might be raised further by 100 bps.

Considering that, First Metro and UA&P Capital Markets Research said that, while bond yields further increase in the early part of this fourth quarter, these would likely ease toward the end of the year. INQ