Saturday, 8 October 2011

Treasury to offer P20B in retail bonds

Agency sets auction on Monday to determine pricing
By: Ronnel W. Domingo
Philippine Daily Inquirer

The Bureau of the Treasury is offering at least P20 billion in 10-year and 15-year retail treasury bonds through a price-setting auction on Oct. 10.
In a notice to eligible dealers of government securities, Deputy Treasurer Eduardo S. Mendiola said a minimum volume of P10 billion for each tenor would be offered.

Mendiola added that the RTBs, which are available in P5,000 denominations, would be offered to the public until Oct 17.

Monday’s launching offer is much smaller than the previously announced minimum total volume of P50 billion to P60 billion for both tenors.

Malacañang has authorized the Treasury to issue as much as P500 billion in RTBs, but National Treasurer Roberto B. Tan had said that the agency would not use up the maximum amount in one auction considering that the borrowing authority for such volume “is good until it is used up.”

Tan also said that the government would raise “only what we need and also what market demand can accommodate.”

In recent RTB issuances, the government was able to raise a total of at least P100 billion.

This is the second time this year that the Treasury is issuing RTBs. The first outing raised some P104 billion, including P33 billion in five-year paper and P71 billion in 10-year bonds.

The five-year RTBs carried a coupon of 6 percent while the 10-year bonds fetched 7.375 percent.

Buyers offered a total of P135 billion, or more than four times the minimum offered volume of P30 billion.

For the latest round of the RTB float, the Treasury has tapped as issue managers First Metro Investment Corp., Metropolitan Bank and Trust Co., BDO Capital, BPI Capital and Land Bank of the Philippines.

Likewise, Rizal Commercial Banking Corp., Development Bank of the Philippines, Philippine National Bank , China Banking Corp. and Deutsche Bank were named as arrangers.

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