P25B raised from sale of reissued T-bonds

MANILA, Philippines  -The national government raised P25 billion from the full award of all seven-year Treasury bonds at an auction held on March 28.

These were reissued securities with a remaining term of six years and six months, and fetched an average yield of 6.162 percent.

The resulting yield was 63.4 basis points (bps) lower than the average 6.796 percent recorded in the previous issuance in January.

Also, the resulting rate was 83.8 bps lower than the original coupon rate of 7 percent, set on its first issue in October 2022.

Further,  it was lower than corresponding rates at the secondary market for government securities by 18.1 bps against 6.343 percent.

However, the latest average rate was higher by 3.7 bps than the 6.125 percent for corresponding corporate bonds at the secondary market.

The offering was oversubscribed, with lenders making available a total of P46.862 billion.

Results from the latest auction appear to be continuing a scenario that First Metro-UA&P Capital Markets Research observed in January and February.

“The specter of higher interest rates in the United States and in the Philippines has spooked bond investors as market analysts had previously penciled in lower rates,” First Metro-UA&P said.

The group noted that 7-year T-bond yields fell by 62.4 bps in January while these rose by 23 bps at the secondary market.