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Gov’t to sell at least P30B in RTBs

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By Beatrice M. Laforga, Reporter

THE Bureau of the Treasury (BTr) is looking to raise at least P30 billion via the issuance of retail treasury bonds (RTB) starting Tuesday, Jan. 28.

In a notice posted on its website on Friday, the BTr said the fixed-rate RTBs will have a tenor of three years and an initial volume size of P30 billion, with option to upsize.

This will be the government’s first RTB offering this year and the 23rd issuance overall, following the sale of five-year RTBs in March last year where the Treasury raised P235.935 billion.

The offer period will start on Tuesday, Jan. 28 and run until Feb. 6 or at an any earlier date set by the BTr.

The three-year papers will be issued on Feb. 11 and mature in 2023.

These type of papers are offered to small investors as they consist of low-risk, higher-yielding savings instruments backed by the national government.

The papers will have a minimum investment of P5,000 and in multiples of P5,000 thereafter.

National Treasurer Rosalia V. De Leon said in a phone message that the proceeds of the fundraising activity will be used to fund the general budget.

Robinsons Bank Corp. peso debt trader Kevin S. Palma said the offer will likely be met with strong demand from the general investing public.

“The government was also prudent to come up with ways to manage its debt after it re-introduced its bond switch program. It basically allows current investors of the RTB 03-08 to extend maturity for another three years without having to shell out some cash,” Mr. Palma said in a Viber message on Friday.

In a separate notice, the Treasury said the RTBs will be officially launched on Tuesday along with its plan to “conduct switch tender offer for the 19th tranche of RTB as part of its liability management exercises.”

To encourage “wider participation among individual investors,” BTr said it will continue using its online ordering facility or the RTB Online Facility.

When ordering through the online platform, the BTr said a maximum of P500,000 will only be accepted per transaction.

The interest rate will be determined through a Dutch auction “based on current market levels of comparable securities rounded down to the nearest 1/8 of one percent.

Meanwhile, interest payments will be paid quarterly in arrears on the last day of each three-month interest period.

The bonds will be listed on the Philippine Dealing and Exchange Corp.

Of the P1.4-trillion borrowing program this year, the government will borrow 75% from the local market, while the remaining 25% will be sourced from external sources.

The Treasury has set a P420-billion local borrowing program this quarter, broken down into P240 billion in Treasury bills and P180 billion via Treasury bonds.

Earlier this week, the Treasury raised €1.2 billion from its offer of the euro-denominated bonds, €600 million each for the two tenors — three years and nine years.

Broken down, the three-year bonds were priced at a rate of 0.1%, while the nine-year papers carry a coupon of 0.7%, a spread of 40 basis points (bps) and 70 bps over benchmark rates, respectively.

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