Gov't rejects bids for 3-year T-bonds | Inquirer Business

Gov’t rejects bids for 3-year T-bonds

/ 12:44 PM September 27, 2023

MANILA  -The national government rejected all tenders for its three-year Treasury bonds as waning lenders’ appetite rendered the offer undersubscribed, following hawkish signals from the Bangko Sentral ng Pilipinas.

At the auction held on Tuesday, tenders totaled at only P27.6 billion, falling short of the P30-billion offer.

“With a remaining term of two years and 11 months, the average rate for the reissued T-bonds reached 6.482 percent had it been awarded,” the Bureau of the Treasury said in a statement.

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That average yield would have been 26 basis points higher than the 6.222 percent recorded in the previous auction held on Sept. 5, when the three-year debt paper was originally issued.

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During that first auction, the auction committee resorted to a partial award, raising only P21.2 billion out of P30 billion.

Also on Tuesday, rates were even lower at the secondary market, with the Bloomberg Valuation Service (BVAL) pegging the yield on three-year corporate bonds at 6.208 percent.

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Further, BVAL rated corresponding government securities at 6.181 percent.

Meanwhile, the BTr is launching today (Sept. 27) its second Retail Dollar Bond or RBD2, setting a target to raise a minimum $200 million.

That amount is just a fifth of the $1 billion that finance officials earlier said was the minimum volume for RBD2. The maiden RBD, issued in 2021, raised about $1.6 billion.

For RBD2, interested lenders could invest as little as $200 or the peso equivalent of that amount.

Last week, Finance Secretary Benjamin Diokno said the government was also considering a minimum offer volume of $1 billion for the planned maiden “sukuk” bonds.

The target is to issue this fixed-income debt instrument, which complies to shari’ah or religious laws of Islam, in the fourth quarter this year.

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“These are Islamic issuances that will diversify the government’s sources of financing, widen our investor base, and boost investments in physical and digital connectivity,” Diokno said.

TAGS: auction, treasury bonds

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