Landbank, DBP tapped as lead arrangers for RTB

The government has tapped the Land Bank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP) as lead arrangers for a planned retail treasury bond (RTB) offer, Deputy Treasurer Eduardo Mendiola said yesterday.

The two government financial institutions are expected to tap other private banks as co-arrangers for the debt sale, which may happen as early as October.

The government has also mandated DBP as the lead arranger for a domestic bond exchange, which may be implemented in November, Mendiola also said.

The government hopes to sell at least P60 billion in 25-year RTBs as longer-term debt would allow the government to manage its liabilities better, he added.

“They (Landbank and DBP) will have to finalize their proposals,” he said.

He said that as seen in the February RTB debt sale of 15-year and 20-year bonds, investors are already starting to feel comfortable parking their funds in long-term debt knowing they can sell this anytime in the secondary market.

Aside from retail investors, RTBs are also attracting institutional investors who want safe havens for their investments.

RTBs are debt papers issued by the government for as low as P5,000. These instruments are ideal options for retail investors who want to park their funds in government debt papers.

The government is hoping to exceed the P179.9billion RTB sale in February.

After the planned RTB sale, the government will embark on a domestic debt exchange as part of its debt liability management strategy.

Under the plan, the government will exchange outstanding shorter-dated debt in the market with longer-dated papers.

Mendiola said the government is looking at issuing P60 billion of each of the following tenors: five-, seven-, 10-, 15-, 20- and 25-year T-bonds and exchange these with outstanding debt in the market.