Yields on reissued bonds drop amid strong investor demand

THE GOVERNMENT fully awarded the dual-tenor Treasury bonds (T-bonds) it auctioned off on Tuesday as strong demand helped pull down rates.

- K.K. Chan

The Bureau of the Treasury (BTr) raised a combined P35 billion as planned from its dual-tranche offering of T-bonds as demand reached P138.118 billion or nearly four times the amount placed on the auction block.

Broken down, the government borrowed the programmed P20 billion via reissued seven-year bonds that have a remaining life of four years and eight months as total bids were at P71.687 billion or over thrice the offer volume.

The bonds were awarded at an average rate of 5.649%, with accepted bid yields ranging from 5.635% to 5.658%. This was 12.3 basis points (bps) lower than the 5.772% fetched for the series’ last award on Sept. 9 and was also 72.6 bps below the 6.375% coupon for the issue.