MANILA – The strong demand for fresh issuance of seven-year Treasury bond (T-bond) prompted the Bureau of the Treasury’s auction committee to make a full award of P9 billion, state media reported.
The bond has a coupon rate of 4.75 percent, similar to the same tenor issued on July 17, 2012. Also, secondary rate for the same tenor was at 4.75 percent Tuesday.
National Treasurer Roberto Tan dubbed as “favorable” the turnout of the auction, noting that the “market is liquid” and is “looking for good placements.”
“Everything is falling in place (which is) a recognition that the economy is moving forward,” he said.
Bids for the debt paper was more than twice the offering after it reached P24.69 billion.
Average rate of the bond stood at 4.66 percent while highest was at 4.75 percent and lowest was at 4.50 percent.
Meanwhile, Tan said they had received proposals for the planned issuance of Retail Treasury Bond (RTB) and debt swap in the last quarter this year.
“We are assessing these proposals and we’ll announce our decision at the proper time,” he said.
Deputy Treasurer Eduardo Mendiola earlier said the Aquino government planned to sell 25-year RTB since the longest retail bond tenor issued to date was 20-year.
“It should be longer, that’s the rational way to go. It will help government manage its debt and we also provide asset for financial institutions (that need that tenor) and for retail investors,” he said.
RTBs are named as such since it is intended for small investors as minimum placement is P5,000.
The last RTB issuance of the government was in February 2012 when it sold P179.9 billion worth of 15 and 20-year RTBs. (Joann Santiago)
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