Treasury awards P35 billion worth of reissued 20-year bonds

MANILA, Philippines — The government made a full award of the P35 billion worth of reissued 20-year bonds on the back of strong demand for the long-term debt papers.

During the auction, the Bureau of the Treasury (BTr) raised the full programmed amount from total tenders of P61.91 billion, making the offer almost twice oversubscribed.

The reissued securities with a remaining term of 19 years and three months fetched an average rate of 5.084 percent. Bids went as high as 5.190 percent to as low as 4.974 percent.

With the award, this brought the total outstanding volume for the series to P177.6 billion.

National Treasurer Rosalia de Leon said market expectations that inflation “will be tamed going into next year” are driving demand for long-tenor securities which also fetch higher yields.

To take advantage of the still flush domestic financial markets, the BTr is raising P5 billion more through its tap facility that gives eligible government securities dealers access to the debt papers after the primary auction.

The BTr is raising P215 billion from the bond market in June to take advantage of the ample liquidity in the system and sustained demand for safe and higher-yielding assets.

The borrowing program for next month was ramped up from P170 billion programmed in April and May and P160 billion in March.

The Treasury raised the volume of bonds with longer maturities in the tenor mix after seeing robust demand in the previous auctions.