Treasury rejects all bids for T-bonds as rates soar

MANILA, Philippines — The government was not able to secure P30 billion in long-term securities yesterday, its first time to reject all bids in over nine months as rates picked up.

The Bureau of the Treasury rejected all bids in yesterday’s auction for the reissued 20-year T-bonds on offer with a remaining life of 15 years and five months.

This, as investors demanded rates beyond what the government can offer.

The 15-year T-bonds fetched an average yield of 6.927 percent, 30 basis points higher than the reference rate of 6.627 percent.

Rates went from just a low of just 6.723 percent and a high of 7.24 percent.

This is the first time in nine months that the Treasury rejected all bids, the last being on Nov. 2, 2022 after rates surged by 46 basis points.

Likewise, yesterday’s average rate was lower than the 6.75 percent coupon rate when the T-bonds were first issued last January 2019.

Nonetheless, the average yield was lower than the 6.971 percent during the last 15-year T-bond auction on July 11.

At that time, the government fully awarded P30 billion.

Demand for yesterday’s securities attracted P35.392 billion bids, oversubscribing the auction by just 1.176 times.

Such a demand is 26 percent lower than the previous 15-year T-bonds on offer that reached P47.501 billion.

For this month, the Treasury aims to raise P225 billion from the local debt market. Of this, P150 billion is expected to come from T-bonds.

It has so far raised P83.568 billion in long-term debt papers.