Treasury fully awards reissued bonds after BSP rate reduction

THE GOVERNMENT fully awarded reissued Treasury bonds (T-bonds) on Tuesday at lower yields, as investors placed strong bids after the Bangko Sentral ng Pilipinas’ (BSP) latest policy rate cut and signals that its easing cycle might end soon.

- By Aaron Michael C. Sy

The Bureau of the Treasury (BTr) raised P30 billion as planned from the reissued 10-year bonds, with tenders reaching P66.69 billion — more than double the offer. This brought the outstanding volume for the series to P485.6 billion.

The securities, which have a remaining life of seven years and 13 days, were awarded at an average rate of 5.939%. Accepted yields were 5.9% to 5.95%.

The average rate dropped by 18.9 basis points (bps) from July 8 and was 81.1 bps below the 6.75% coupon. Still, it was slightly higher than secondary market levels — 2.1 bps above the 5.918% yield for the same series and 3.4 bps over the 5.905% rate for seven-year debt as of Sept. 1, based on PHP Bloomberg Valuation Service reference rates.