P25-B Treasury bonds fully awarded but rates rise

MANILA  -The national government raised P25 billion as planned from reissued 10-year Treasury bonds, but the full award saw the cost of borrowing rise.

The T-bonds, originally issued in September 2022 and with a remaining life of nine years and three months, fetched an average rate of 5.958 percent.

The new average was 22.6 basis points (bps) higher than the 5.732 percent seen in the previous reissuance, which was earlier this month.

Even then, the auction committee led by the Bureau of the Treasury said the resulting average rate was “below the secondary market benchmark.”

The Bloomberg Valuation Service pegged the rate on corresponding corporate bonds at 5.971 percent or 1.3 bps higher.

However, the rate on corresponding government securities was pegged at 5.915 percent or 4.3 bps lower.

The offering was oversubscribed by almost three times, with lenders making available a total of P74.8 billion.

“With its decision, the committee raised the full program of P25 billion, bringing the total outstanding volume for the series to P215 billion,” the Bureau of the Treasury said. INQ

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