BTr fully awards re-issued 20-year Treasury bonds

By Anna Leah Gonzales

July 9, 2024, 6:34 pm

MANILA – The Bureau of the Treasury (BTr) fully awarded bids for the re-issued 20-year Treasury bonds (T-bonds) during Tuesday's auction.

With a remaining term of seven years and nine days, the re-issued T-bonds fetched an average rate of 6.286 percent, lower than the prevailing secondary market rate.

The comparative PHP Bloomberg Valuation Service (BVAL) average rate was at 6.378 percent.

It was also lower than the 6.624 percent average rate in the previous seven-year T-bond auction on June 4, 2024.

Rizal Commercial Banking Corporation chief economist Michael Ricafort in a Viber message said the lower average auction yield was after local monetary officials reiterated a possible local policy rate cut as early as August 2024, ahead of a possible Fed rate cut.

He said the lower average auction yield was also after signals on additional national government foreign bond sales this year which could somewhat hedge and help reduce the need for more local borrowings.

"[It was] also after lower U.S. Treasury yields recently, with the benchmark 10-year U.S. Treasury yield at new 1-week lows at 4.28%, also among 3-month lows after mostly softer U.S. economic data that could support Fed rate cuts for the coming months, as the Fed Fund Futures priced in -0.50 or 2 Fed rate cuts in 2024, with a 75% chance of a Fed rate cut as early as September 2024," Ricafort said.

The auction was 3.8 times oversubscribed with total tenders reaching PHP114.9 billion.

The BTr raised the full program of PHP30 billion, bringing the total outstanding volume for the series to PHP343.3 billion. (PNA)