Treasury rejects T-bond bids

The Bureau of the Treasury rejected all bids for the re-issued 10-year T-bonds offered in an auction on Tuesday.

The auction was undersubscribed, as tenders for the P25 billion in debt paper reached only P13.371 billion or just about half of the offering.

“The auction committee decided to reject all tenders for the re-issued treasury bonds with remaining life of six years and 11 months on the back of very low demand and higher than expected rates,” the Treasury said in a statement issued after the auction.

The previous rate of the re-issued IOUs was 3.501 percent, but bid rates rose to an average of 4.675 percent.

The Treasury offered a total of P75 billion in T-bonds in the third quarter.

In August, the Treasury fully awarded P25 billion in newly issued five-year T-bonds at an average rate of 3.352 percent.

In July, the Treasury also made a full award of P25 billion in re-issued three-year T-bonds at a higher rate of 3.089 percent.

The latest BTr data showed that treasury bonds accounted for the bulk of outstanding IOUs as of the end of August, with a face amount of P3.573 trillion.

As of August, the value of outstanding debt paper, including treasury bills, issued by the government slightly declined to P3.855 trillion as more T-bonds matured that month.