Gov’t fully awards dual-tenor bond offering at mixed yields

THE GOVERNMENT made a full award of the dual-tranche Treasury bonds (T-bonds) it auctioned off on Tuesday at mixed rates amid market preference for papers at the belly of the curve on expectations of further monetary easing by the Bangko Sentral ng Pilipinas (BSP) and the US Federal Reserve.

- A.M.C. Sy

The Bureau of the Treasury (BTr) raised P35 billion as planned via its dual-tenor T-bond offer as total bids reached P77.776 billion, or more than double the amount placed on the auction block.

Broken down, the Treasury borrowed the programmed P20 billion via the reissued 10-year bonds that have a remaining life of six years and 10 months, with total bids reaching P55.519 billion or almost three times the amount on offer.

This brought the total outstanding volume for the bond series to P505.6 billion, the BTr said in a statement, adding that the average yield fetched was lower than both the rate quoted at the previous auction and for the seven-year benchmark at the secondary market.

The bonds were awarded at an average rate of 5.798%, and accepted yields ranged from 5.75% to 5.805%. This was 14.1 basis points (bps) lower than the 5.939% fetched for the series' last award on Sept. 2 and was also 95.2 bps below the 6.75% coupon for the issue.