Treasury raises P120 B from t-bonds

The government raised the entire program of P120 billion in long-term securities this month amid the downtrend in investor asking rates.

The Bureau of the Treasury yesterday fully awarded P30 billion for the original issue of 10-year T-bonds. This is the last T-bonds auction for January.

The momentum was sustained from the latter part of 2023, marking the ninth straight week of full awards for T-bonds.

This brought total T-bonds raised for the month at P120 billion, which is the entire target to be borrowed from the local debt market.

Rates for the four auctions were generally on a downtrend in anticipation of a pause from the US Federal Reserve later this month.

The Fed is also seen cutting rates by as much as 150 basis points this year, with the first move likely as early as March.

Such a move could be matched locally as inflation moves closer to the target of the Bangko Sentral ng Pilipinas.

During yesterday’s auction, the 10-year T-bonds fetched an average rate of 6.218 percent, down by 26.2 basis points from the 6.248 percent BVAL Reference Rate, which is the standard for securities.

Rates went from a low of 6.1 percent and a high of 6.25 percent. The coupon rate is set at 6.25 percent.

Yesterday’s average rate was also slightly lower than the 6.224 percent during the last 10-year T-bond auction on Dec. 5, 2023.

Demand for yesterday’s securities attracted P102.233 billion bids, oversubscribing the auction by 3.41 times.

Bids more than doubled from the last 10-year auction where offers only reached P40.651 billion.

The latest offering has a maturity date of Jan. 25, 2034.

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