Thursday, 18 March 2010

Investors swarm P8.5b worth of Treasury bonds

Elaine R. Alanguilan
Manila Standard
http://www.manilastandardtoday.com/insideBusiness.htm?f=2010/march/17/business2.isx&d=2010/march/17

The Philippines sold P8.5 billion in five-year Treasury bonds Tuesday as investors swarmed the auction.

“The market is very liquid,” said National Treasurer Roberto Tan following the auction. Banks tendered P27.01 billion, or more than three times the P8.5-billion bond offering.

Tan said there were no maturities this week, adding there could be a spillover of freed-up liquidity when P40 billion worth of three- and five-year bonds matured three weeks ago.

The government sold the debt at an average of 6.09 percent, down 14.3 basis points from the previous average of 6.233 percent for sovereign bonds with similar tenor issued earlier.

The Treasury re-issued bonds it originally sold in October 2007 to extend the maturity to Oct. 4, 2014.

“This is a good time for issuers [in the bond market]. We should be seeing some government-owned and -controlled corporations and public corporate tapping the bond market in the second quarter to take advantage of the favorable market,” said Tan.

The government is lining up the issuance of at least $500 million worth of so-called OFW or workers’ bonds next month. The bonds are considered part of the government’s domestic borrowing program for the year.

“We have authority from the President to issue enough,” said Tan when asked to confirm whether or not Malacañang had already given the green light for the proposed fund-raising exercise.

He said the terms of the issuance, including the volume of the offering, was not finalized pending approval from Bangko Sentral ng Pilipinas and the Bureau of Internal Revenue on the tax treatment of the debt.

Tan said the government might also consider issuing retail treasury bonds in the latter part of the year amid heavy maturities. The government raised about P104 billion from the issuance of RTBs in October last year.

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