Treasury awards P25B worth of 5-year T-bonds

THE BUREAU of the Treasury (BTr) fully awarded yesterday P25 billion in newly issued five-year treasury bonds at an average rate of 3.352 percent.

The auction was oversubscribed, as investors tendered P51.603 billion for the treasury bonds maturing on Aug. 20, 2020.

“We got a very good auction volume which reflects demand and the seriousness of those bidding,” Nation- al Treasurer Roberto B. Tan told reporters after the auction.

The average annual rate was up 6.8 basis points from 3.284 percent during the previous auction for five-year IOUs.

“This is the price we would prefer to be in,” Tan said, citing yields of more than 3 percent among other bonds with remaining lives of four to five years.

Last month, the BTr also made a full award of P25 billion in re-issued three-year T-bonds at a higher rate of 3.089 percent.

The BTr will auction off P25 billion in seven-year debt paper next month.

In the meantime, Tan said the BTr was firming up the planned debt swap of up to P300 million.

The National Treasurer said he would meet with the underwriters today to decide on the tenors. Reports earlier stated the BTr was looking at tenors of 10, 20 or 25 years.

The eight underwriters were BDO Capital, BPI Capital, Citibank, DBP, Deutsche Bank, First Metro Investment Corp., HSBC and Land Bank.

The BTr wants to undertake domestic liability management ahead of a US Federal Reserve move to adjust interest rates, which is expected to happen next month.

The debt swap is aimed at getting rid of illiquid ISINs in order to put more and more into deep-volume securities. ISINs mean International Securities Identification Numbers, which identify specific securities.