THE Philippine government successfully returned to the renminbi market on Wednesday with its second issuance of Panda bonds amounting to RMB2.5 billion with a three-year tenor.
“So today we are returning to the Panda market. We are pricing, as we speak, the RMB2.5-billion issue. So as I’ve said yesterday, this is going to be through an auction process, and as we speak the auction is ongoing in Beijing [China]. We will know better at 2:30 p.m. today, we should’ve priced already the issue,” Deputy Treasurer Erwin D. Sta. Ana said.
Monday (May 20, 2019) was the settlement date for the Panda bonds, officials said.
No details were provided yet as to the rate of the Panda bond issue as the Bureau of the Treasury said that the auction for the government security was still ongoing on Wednesday in Beijing, China.
The country’s first Panda bond issuance was in March 2018, with the awarded security amounting to RMB1.46 billion with a three-year maturity. The bonds fetched a spread of only 35 basis points over the benchmark.
The Philippines then set a record in the Panda bond market,
as almost 90 percent was cornered by offshore or overseas buyers, with
overwhelming demand pushing the coupon rate to its lowest at 5 percent,
according to the Department of Finance (DOF). The Philippines’s offering was
6.3 times covered with RMB9.2-
billion orders.
T-bonds auction
Meanwhile, the BTr awarded the full P20 billion on offer for the reissued seven-year Treasury bonds (T-bonds) on Wednesday, as rates for the security were at least 19 basis points lower than the previous auction rate.
The rate for the security settled at 5.743 percent, or a 19.1-basis-point decrease compared to the previous auction level of 5.934 percent.
“Another great auction for us, more than 2.5 times covered, obviously, so we are awarding it at 19 basis points lower than the previous auction we had in March. So it’s a good turnout,” Sta. Ana said.
Bids for the government security amounted to P51.278 billion, which is more than twice oversubscribed.
The lower rates were attributed to the recent move of the Bangko Sentral ng Pilipinas (BSP) to ease its monetary-policy stance, as well as the continuous downtrend of the country’s inflation rate.