Investors swarm T-bond auction

March 13, 2024 | 12:00am

MANILA, Philippines — Investors swarmed the latest offering of long-term securities, resulting in slightly lower rates and allowing the government to raise P30 billion.

The Bureau of the Treasury yesterday fully awarded P30 billion for the reissued 10-year T-bonds with a remaining life of nine years and 10 months.

During the auction, the T-bonds fetched an average yield of 6.227 percent, 2.6 basis points lower than the reference rate of 6.253 percent.

Rates went from a low of 6.198 percent and a high of just 6.24 percent.

However, this was slightly higher by 0.9 basis point in reference to the original issue and last auction of the same tenor on Jan.23.

At the time, the Treasury also awarded the entire P30 billion in offer.

Demand for yesterday’s securities attracted P96.071 billion in bids, oversubscribing the auction by 3.2 times.

This was just six percent lower than the original issue where offers reached P102.233 billion. The latest offering has a maturity date of Jan. 25, 2034.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the matured P700 billion in retail T-bonds this week could have added to the peso liquidity and funds in the financial markets.

This effectively increased the demand and lowered the yields for government securities, as these excess funds could be reinvested.

The Treasury aims to raise P180 billion from the domestic debt market this month.

Of this, P120 billion is expected to come from T-bonds. It has so far raised half of the program.