Gov’t fully awards reissued bonds at lower rates

THE GOVERNMENT made a full award of the reissued seven-year Treasury bonds (T-bonds) it offered on Tuesday at a lower average rate on strong demand, with investors looking to lock in high yields as they expect further monetary easing here and in the United States.

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The Bureau of the Treasury (BTr) borrowed P30 billion as planned via the reissued seven-year bonds it auctioned off, with total bids reaching P79.666 billion or nearly triple the amount on offer.

This brought the total outstanding volume for the bond series to P386.7 billion, the Treasury said in a statement.

It added that it made a full award as the papers fetched an average yield that was lower than what was quoted at the previous auction and the comparable secondary market rate.

The reissued bonds, which have a remaining life of four years and 10 months, were awarded at an average rate of 5.772%. Accepted yields ranged from 5.76 to 5.78%.

The average rate of the reissued papers was 12.4 basis points (bps) lower than the 5.896% fetched for the series’ last award on July 1 and was also 60.3 bps below the 6.375% coupon for the issue.

This was likewise 2 bps lower than the 5.792% fetched for the same bond series and 4.2 bps below the 5.814% quoted for the five-year paper — the benchmark tenor closest to the remaining life of the issue — at the secondary market before Tuesday’s auction, based on the PHP Bloomberg Valuation Service Reference Rates data provided by the BTr.