THE Bureau of the Treasury sold P35 billion in reissued 20-year Treasury bonds (T-bonds) on Tuesday as investors continued to bet on longer tenors.
Total bids tendered for the T-bonds reached P65.27 billion, making the auction almost twice oversubscribed.
The debt paper, which has a remaining life of 11 years and eight months, is set to mature on March 21, 2033. It has a coupon rate of 3.625 percent.
The security also capped at a higher average rate of 4.187 percent, soaring by 142.8 basis points from its previous average rate of 2.759 percent when it was auctioned in July last year.
National Treasurer Rosalia V. De Leon told reporters that strong investor demand for the debt paper was evident during the auction on the back of expectations of “steady” inflation for the month of June.
“Investors continue interests on long end with good bid to cover for [the security,] expecting steady June inflation print and liquidity augmented from P31-billion maturity this week,” she said.
The country recorded a steady inflation rate of 4.5 percent from March to May. However, inflation in May this year was still higher than the 2.1 percent posted in the same month a year ago.
Apart from the primary auction, the Treasury also decided to auction off an additional P5 billion in reissued 20-year T-bonds via tap facility.
For July, the Treasury has set to borrow P235 billion from the local debt market, slightly bigger than the P215 billion it programmed in June.
The Treasury is aiming to raise the amount through auctioning off P60 billion in T-Bills and P175 billion in T-bonds.
The national government’s programmed borrowing this year is at P3.1 trillion, of which around 75 percent is expected to be raised through domestic sources.