After a four-year hiatus, the Bureau of the Treasury (BTr) sold P15 billion worth of 20-year Treasury bonds (T-bonds) auction on Tuesday on the back of strong demand for longer-yielding government security.
According to Deputy Treasurer Erwin D. Sta. Ana, the T-bonds sale received a healthy turnout since the issuance of a similar tenor in 2013.
“Well, it’s a healthy turnout. You know this is the first time we issued a 20-year security since 2013. So despite that this is on the longer sector of the curve, we are actually pleased with the turnout,” Sta. Ana said.
The bonds attracted tenders aggregating P28.037 billion that compelled the auction committee to reject P13.037 billion.
But still, Treasury officials allowed the 20-year rate to move up to 5.104 percent, from only 4.512-percent, rate in the previous auction.
“This means that there’s investor confidence on the Republic and that sector of the curve has a demand. I think the market participants are also waiting for the Treasury to issue on the longer end of the curve,” he added.
The government last sold 20-year T-bonds on March 19, 2013, when it sold an aggregate P25 billion. The market at that time submitted bids amounting to P118.334 billion that forced the auction committee to reject P93.334 billion.
In April the BTr successfully sold a total P181 billion in 20-year retail Treasury bonds (RTBs) that reflected strong demand from the investing public. An earlier batch of three-year RTBs on March 28 was conducted prior to this exercise.
The auction committee sold P70 billion from the initial offer of only P30 billion at a coupon rate of 4.250 percent on the first day of the sale.