Favorable rates bids abet govt fund-raising

This undated photo shows the Bureau of the Treasury building in Manila.

THE Bureau of the Treasury (BTr) on Tuesday awarded P49 billion in 20-year reissued Treasury bonds (T-bonds), exceeding its P35-billion offering.

The Treasury said its auction committee decided to fully award the T-bonds due to the favorable interest rates bids by investors.

“With a remaining term of 19 years and 10 months, the security fetched an average rate of 6.525 percent, lower than the original coupon rate of 8.125 percent set on its original issuance last November 2022 as well as the comparable secondary market benchmark,” the Treasury said in a statement after the auction.

The secondary market benchmark for a 20-year T-bond was at 7.070 while secondary market benchmark coupon rate for the government security was at 7.032 percent.

The interest rates for the 20-year T-bonds were as low as 6.49 percent and as high as 6.6 percent.

Treasury data showed that the auction was 3.82 times oversubscribed as total offer from investors reached nearly P134 billion, prompting its auction committee to “double the allocation for non-competitive bids.”

“With its decision, the Committee raised P49.0 billion, bringing the total outstanding volume for the series to P76.6 billion,” it said.

This is now the fourth consecutive T-bond offering that Treasury made a full award, historical BTr data showed. The national government seeks to raise a total of P200 billion from the sale of Treasury bills and T-bonds this month.

For the whole year, the national government plans to borrow P2.207 trillion with a 75:25 mix in favor of domestic sources. In terms of domestic borrowings, the national government aims to raise a total of P1.654 trillion, P54.1 billion of which coming from the sale of Treasury bills with the remaining amount would be funded through auction of T-bonds.

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