ASEAN KEY DESTINATIONS
Philippines launches bond offering
The Aquino administration on Tuesday launched its second Retail Treasury Bond (RTB) offering, with the private underwriter hoping to raise five times the amount initially set for the borrowing. At Tuesday’s auction, the government awarded P10 billion(US$229.8 million) of the five-year debt papers, and another P10 billion of the 10-year fixed-income securities.
The five-year RTB was three times oversubscribed at P31.093 billion, while the 10-year fetched as much as P20 billion in bids.
In contrast, the government’s P25-billion RTB offering last August generated as much as P97-billion in demand.
The coupon rate for the current five-year RTB was set at 6 percent, or 132.6 basis points higher than when the same security was auctioned off last year. The 10-year debt paper’s coupon rate of 7.375 percent also was higher by 145.6 basis points than the previous average of 5.919 percent. At the secondary market, done deals for five-year bonds fetched 5.6 percent, while those for 10-year notes fetched 6.9 percent.
“We have a very robust demand for RTBs,” National Treasurer Roberto Tan said after the auction. “Of course we had it better than that at the secondary market,” he added.
Juanchito Dispo, executive vice president of First Metro Investment Corp. (FMIC), said that demand could easily go up to P80 billion.
“The rates are more attractive now,” he said.
With government-owned or controlled corporations seeking another P20 billion, Dispo said the offering could reach “at least P100 billion.”
The underwriters recommended placing a cap of P10 billion a day during the offer period, which began Tuesday and would run until March 1.
Besides FMIC, other underwriters are Land Bank of the Philippines, Development Bank of the Philippines, and BPI Corp.
On the heels of the RTB launch, the Bureau of Treasury announced the cancellation of next week’s P9-billino five-year Treasury bond offering.
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