THE interest rates on reissued five-year Treasury bonds (T-bonds) went down by 25.3 basis points to settle at 3.267 percent per annum with a coupon rate of 3.875 percent, it was learned on Tuesday.
When the Bureau of the Treasury (BTr) auctioned off such T-bonds in February, the average interest rates demanded by investors settled at 3.52 percent, with a coupon rate of 2.125 percent.
The BTr made a full award of P25 billion worth of T-bonds offered in Tuesday’s auction.
According to National Treasurer and auction-committee Chairman Rosalia de Leon, the lower interest rates on the reissued T-bonds are in line with the secondary market, and are caused by expectations of lower inflation rates.
Overall inflation rates in October eased to 4.3 percent, down by 0.1 percent from the inflation figures registered in September.
“The rates have really been coming down given the inflation expectations. Even in the secondary market, you have seen the rates at 3.3 percent on Monday, and something [about] 3.2 percent on Tuesday,” de Leon said. The auction was oversubscribed, with total bids amounting to P66.46 billion, as against the P25-billion offering for the five-year T-bonds.
Image credits: Alvin I. Dacanay