Government issuing P30 billion retail T-bonds

MANILA, Philippines — The government  plans to offer at least P30 billion in five-year retail Treasury bonds (RTBs) starting next week to raise new funds amid the pandemic, while also refinancing maturing debt, the Bureau of the Treasury (BTr) said.

In a notice posted on its website, BTr announced that the Philippine government will be issuing five-year, fixed-rate RTBs due 2025 in a minimum principal amount of P30 billion.

The price-setting auction for the securities will be held on July 16. They will also be available to small investors beginning on the same date until Aug. 7. The target settlement date is on Aug. 12.

According to the BTr, the RTB issuance will have a debt swap component, as holders of maturing bonds, particularly RTB 10-01, FXTN (fixed rate Treasury note) 05-73, RTB 10-02 and FXTN 07-57, may exchange their old debt notes for the new RTBs.

“The purpose of the invitation is to present a reinvestment opportunity for holders of eligible bonds given its forthcoming maturity dates. The exchange offer is likewise intended to manage refinancing risk in the debt portfolio of the Republic and is an integral part of its overall liability management program,” BTr said.

RTB-10-01 is set to mature on Aug. 19, 2020, while FXTN 05-73 will mature on Aug. 20. RTB 10-02 will also be maturing on March 3 next year while FXTN 07-57’s tenor will end on March 20, 2021.

According to the BTr, government securities eligible dealers (GSEDs) will be allowed to place a maximum of 10 bids at different rates for a maximum of P10 billion per bid. Dealers who have successfully placed bids for a minimum principal amount of P500 million may qualify as selling agents.

Small investors may buy RTBs during the offering period in minimum denominations of P5,000 and integral multiples thereof.

Exchange offers shall be in the minimum amount of P5,000 in multiples of P0.01.

To ensure the wider participation of individual investors in the RTBs, BTr said investors may use the RTB Online Ordering Facility through its website.

The facility will allow investors to settle their investments via the electronic facilities of China Banking Corp., Development Bank of the Philippines, First Metro Securities and Brokerage Corp., Land Bank of the Philippines and Overseas Filipino Bank.

Investors may also use the BONDS.PH mobile application of the Union Bank of the Philippines, the BTr added.

National Treasurer Rosalia De Leon said the android version of the app was launched yesterday.

Through this platform, investors may be able to purchase RTBs using various payment methods, such as Instapay, Pesonet, GCash or PayMaya.

The planned RTB offering would be the 24th tranche to be issued by the government and the second this year.

Last January, the national government successfully raised P310.8 billion from the issuance of three-year RTBs, the highest volume ever recorded for any of its retail offerings.

The debt papers, which will mature in 2023, carry a coupon rate of 4.375 percent.