BTr issues mechanics for Premyo Bonds sale

MANILA, Philippines — The Bureau of the Treasury (BTr) has released the program mechanics for its upcoming Premyo Bonds sale, which will run starting today until Dec. 11.

In a notice of offering posted on its website, the BTr formally announced that it will issue a P3 billion one-year peso-denominated “Premyo Bonds Para sa Bayan” (Premyo Bonds 2).

Aside from new investments, the BTr said holders of Premyo Bonds 1 due on Dec. 18 may opt to switch their debt papers for the securities due in 2021.

The BTr said the settlement date is scheduled on Dec. 16.

According to the BTr’s mechanics, participants can place investments in minimum denominations of P500, with integral multiples of P500 thereafter.

“Every P500 placement is equivalent to one Premyo Bonds unit. Each Premyo Bonds unit entitles the bondholder to one electronic rewards number (e-RN),” the BTr said.

While there is no maximum investment amount, the BTr said only 20,000 Premyo Bonds unit equivalent to P10 million will be eligible per bondholder for inclusion in the main cash rewards.

The BTr said the interest rate would be determined using the prevailing Bloomberg valuation rate for one-year bonds on Nov. 10, rounded up to the nearest one-eighth of one percent. This will be reduced by the cash rewards ratio of 0.625 percent.

Interest will be paid on a quarterly basis.

Should the government be able to raise P3 billion, the BTr set an indicative main cash rewards structure where one investor would win P1 million, 10 would win P100,000 and 50 would win P20,000 per quarter.

However, the BTr said this could still increase depending on the final issue amount. Cash rewards will be determined and announced on the issue date.

The winner of the first tier cash rewards will also receive cash or non-cash rewards from participating institutions. Another 20 small-denomination investors also have a chance to win P50,000 on every cash reward date.

The BTr said the bonds cannot be pre-terminated, nor can they be traded in the secondary market.

The bureau also listed BDO Unibank Inc., BDO Capital and Investment Corp., China Banking Corp., Development Bank of the Philippines, First Metro Investment Corp., Land Bank of the Philippines, Metropolitan Bank and Trust Co., Philippine National Bank, PNB Capital and Investment Corp., and Union Bank of the Philippines as the selling agents for the issuance.