Reissued T-bonds yield lower

The reissued 10-year Treasury bonds fetched lower rates yesterday amid the Bureau of the Treasury’s efforts to improve market participation through its Enhanced Government Securities Eligible Dealers (GSED) program.

During yesterday’s auction, the Treasury awarded in full P15 billion in T-bonds with remaining life span of nine years and seven months.

The securities fetched an average rate of 4.647 percent, 7.1 basis points lower than the 4.781 percent during the previous auction.

It was also lower than the secondary market rate for the same securities which settled at 4.9461 percent before the auction closed.

The auction was oversubscribed, with total tenders amounting to P26.287 billion.

Deputy Treasurer Erwin Sta. Ana said the result of the auction reflects the support of the market for the Treasury’s Enhanced GSED program, which will evaluate the performance of GSEDs and launch a market maker system.

“Several weeks back we launched the Enhanced GSED program. Although we haven’t really finalized the mechanics of it, I think the GSEDs are preparing for that already, And this turnout actually reflects great support,” Sta. Ana

Turn to B4 told reporters after the auction.

Sta. Ana said one sign of the program’s efficiency is the improvement in bid efficiency during recent auctions.

“We’re also noticing that in the past auctions, we see that bid ef- ficiency is getting better. We are now eliminating some throwaway bids. The spread from the lowest to the highest is narrower and tighter. That’s quite efficient bidding for us,” he said.