Sale of T-bonds via tap facility raises ₧25B

THE Bureau of the Treasury raised an additional P25 billion from fully awarding new 7-year Treasury Bonds (T-bonds) via tap facility auction last Tuesday.

This is on top of its sale of P35 billion in the T-bonds the Treasury sold during the primary auction on the same day.

The tap facility auction was opened to all 11 government securities dealers-market makers.

Investors also swamped the tap facility auction as total bids hit P42.12 billion, way above the P25billion on offer.

During the primary auction, the tenor fetched a coupon rate of 3.625 percent, lower than the prevailing secondary market rates. The debt paper is set to mature on April 22, 2028.

For this week alone, the Treasury has already sold a total of P90 billion in debt papers.

On Monday, it raised P25 billion in its primary auction of 91-day, 182-day and 364-day Treasury Bills (T-bills) on Monday and another P5billion via its tap facility auction of 364-day T-bills.

On the same day, the Philippines also announced it may soon offer euro-denominated bonds.

The Philippine government said they may offer 4-year and/or 12-year and/or 20-year euro-denominated bond offering, subject to market conditions.

International credit watchers S&P Global Ratings and Moody’s Investors Service have already assigned investment-grade ratings to the proposed euro-denominated bond issuance of the Philippine government.

S&P Global Ratings announced that they have assigned a “BBB+” long-term foreign currency rating to the proposed benchmark-size euro-denominated bond issuance while Moody’s assigned a senior unsecured rating of Baa2 to the planned bond offering.

The proposed euro bond issuance is expected to be about $500 million. The proceeds from the bonds are intended for general purposes, including budgetary support.

Should the euro bond offering push through, this would be the second time that the country will be tapping the offshore bond market this year after it raised ¥55 billion ($500 million or about P24.2 billion) from its sale of 3-year zero-coupon Samurai bonds last month.

The last time that the government tapped the euro bond market was in February last year wherein it raised 1.2 billion euros.

The country aims to borrow a total of P3.03 trillion this year, roughly the same amount it borrowed in 2020.

The bulk of the gross borrowings this year will be sourced locally at P2.58 trillion while P442.36 billion will be raised from foreign sources.