The government accepted all bids for the reissued three-year Treasury bonds (T-bond) it offered on Wednesday, Aug. 29, as rates went up due to the expectation on inflation amid excess liquidity in the market.
The Bureau of the Treasury (BTr) borrowed P15 billion as planned at Wednesday’s auction of reissued three-year bonds with a remaining life of two years and five months.
The offer was less than twice oversubscribed as total tenders from investors amounted to P26.287 billion.
The bonds, which carry a coupon rate of 4.25%, fetched an average rate of 5.136%, 43.3 basis points higher from the 4.703% recorded in the previous bond auction in May.
At the secondary market prior to the auction, the debt notes were quoted at 5.0557%.
National Treasurer Rosalia V. De Leon said the Treasury decdied to fully award the bonds as the three-year tenors continue to be a “sweet spot” for investors.
“We see that there’s continued appetite in the market [because it’s] shorter than the front end of the curve so three years. That’s a sweet spot for the investors so we decided to full award,” Ms. De Leon told reporters following the auction, adding that their yields were at par with the secondary market.
She noted that the rates went up as market players provide for additional buffer in case the market moves. — Karl Angelo N. Vidal