Treasury makes partial award of T-bills
THE GOVERNMENT made a partial award of the Treasury bills (T-bill) it offered on Monday as market players continued to anticipate a retail bond sale.
The Bureau of the Treasury (BTr) borrowed only P15.598 billion from the P20 billion it intended to raise. Investor demand totalled P28.862 billion, lower than the P30.316-billion in tenders raked in last week.
Broken down, the Treasury borrowed only P4.39 billion out of the programmed P6 billion via the 91-day tenor yesterday even as tenders reached P7.030 billion.
This, as the average rate for the papers went up 18.3 basis points (bp) to 5.733% from the 5.55% fetched during the previous auction.
For the 182-day bills, the Treasury borrowed P6 billion as planned out of total bids amounting to P13.874 billion. Its average yield also picked up 4.5 bps to 5.978% from the 5.933% fetched last week.
On the other hand, the government made a partial award of the 364-day papers, accepting just P5.208 billion out of the P8-billion program and total offers amounting to P7.958 billion. The average yield likewise climbed 6.9 bps to 6.052% from the 5.983% quoted in the previous offer.
The Treasury opened the overthe-counter sale of the instruments once more, which was made available to tax-exempt governmentowned and -controlled corporations from 2-4 p.m. yesterday.
Based on the PHP Bloomberg Valuation Service Reference Rates, the three-month, sixmonth and one-year papers were quoted at 5.566%, 5.89%, and 6.153% yesterday.
Following the auction, Deputy Treasurer Erwin D. Sta. Ana said the Treasury saw tenders amounting to 1.5 times the offer amount, although bulk of the demand was the 182-day papers.
“Feedback from the reports are basically (pointing to a) supply concern with respect to a perspective RTB (retail Treasury bond) issue. So looks like the GSEDs (government security eligible dealers) are factoring in that issuance,” Mr. Sta Ana told reporters yesterday.
National Treasurer Rosalia V. De Leon said last week that the government is looking at issuing RTBs, even as she said the state’s current cash position is “very healthy.”
“It (the RTB issuance) could be this month... the timetable is still within first quarter,” Mr. Sta. Ana said, adding that the retail bond sale will have an online component, which will let retail investors buy the instruments via the Treasury’s website.
“If ever we launch the RTBs, there will be a component of online, which means that individual investors can access our website and there will be an ordering form.”
RTBs are issued to the general investing public. Before the public sale of the bonds, the instruments will be first offered to eligible financial institutions at a rate-setting auction.
The deputy treasurer added that the tenor of the RTBs as well as the minimum volume have yet to be finalized, although Ms. De Leon noted last week that the Treasury will be “looking at the belly of the curve.”
Sought for comment, a trader said T-bill rates yesterday were slightly higher but still within market expectations.
“The demand was skewed on the six-month T-bills due to market anticipation of possible RTBs,” the trader said, adding that the BTr may launch the retail bond sale “sooner than later” to match the P70-billion worth of maturities it is scheduled to pay out today.
For this quarter, the government is planning to borrow P360 billion. Some P240 billion will be borrowed this quarter through 12 weekly T-bill auctions. On the other hand, P120 billion worth of Treasury bonds will also be issued through six fortnightly auctions.