NextGen Day

The newly offered 13-year Treasury bond (T-bond) received an oversubscription and fetched a coupon rate of 6.250 percent on Tuesday.

The securities were sold by the Bureau of the Treasury (BTr) for PHP25 billion, however, the auction committee only gave PHP19.475 billion.

There were 48.769 billion PHP worth of bids, or 1.95 times the volume of the offer.

The average interest rate paid for the debt paper was 6.24 percent.

The decision of the auction committee was made, according to National Treasurer Rosalia de Leon, “to align rates with the secondary level.”

The coupon rate of the debt paper is equivalent to the corresponding rate of the 12-year notes in the secondary market as of April 17, 2023, at 6.2552 percent, according to Michael Ricafort, chief economist of Rizal Commercial Banking Corp.

In part, Ricafort ascribed the trajectory of the debt paper rate to the recent increase in global crude oil prices to a one-month high, which “could lead to some uptick in prices/inflation.”

According to him, the 10-year US Treasury yield, which increased to a two-week high of 3.59 percent, also had an impact on the rate of the debt paper.

The rate of the T-bond was impacted by the peso’s depreciation versus the US dollar, which recently hit a 3.5-month high of 56.20, according to Ricafort.

“However, these are offset by large amounts of maturing Treasury bonds later this week as some of these maturing funds would search for reinvestment opportunities,” he continued.

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