Gov’t closes 10-yr bond offer a day early with P235B raised

The Philippine government ended the public offer period for its new 10-year Treasury bonds a day early. This was after exceeding the P200-billion target on the back of strong demand.

In a statement on Thursday, the Bureau of the Treasury (BTr) said it raised P235 billion in fresh funds.

This, a day after generating an initial P107.07 billion from a rate-setting auction held on Wednesday.

The additional P127.93 billion was raised through the TAP facility. Accessible to institutions that have already made orders and might want to buy more, the facility drew in P135.8 billion in additional tenders.

Originally set to run until Friday, the offer period was cut short due to “overwhelming demand,” largely driven by expectations of another rate cut from the central bank on Thursday.

However, the BTr will proceed with its planned exchange program covering five securities today, Feb. 20.

As expected, the Bangko Sentral ng Pilipinas cut its benchmark interest rate by 25 basis points, bringing the overnight borrowing rate to 4.25 percent.

The initial sale attracted total tenders of P328.467 billion, far exceeding the BTr’s original P30-billion target.

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With such a strong demand, National Treasurer Sharon Almanza told reporters during the rate-setting auction that they are expecting P200 billion by the end of the offering.

“The pricing of the FXTN, which came in close to the 10-year BVAL rate, reflects our disciplined and prudent approach to fiscal management,” she added. She was referring to the secondary market.

The new T-bonds carried a coupon rate of 5.925 percent and fetched an average yield of 5.893 percent.

This year, the national government aims to borrow P2.68 trillion, of which P2.05 trillion will come from domestic creditors.