PH sells P188-B Treasury bonds, a new record

MANILA, Philippines (2nd UPDATE) – The Philippines broke its retail Treasury bond (RTB) sales record on Thursday, October 18, having sold P188 billion worth of the debt papers in a public offer that closed ahead of schedule.

The offer of 25-year RTBs — the first in this tenor —  was supposed to end on October 22, but investors swamped the debt sale, allowing the government to quickly raise the amount it needed.

The sales breached the record P179.9 billion set in February. 

The bonds carried 6.125% coupon rate, and will mature on October 24, 2057. They are designed to provide higher-yield investment alternative to small investors.

Borrowings

Because of the strong demand for the RTBs, the government may reduce its domestic borrowing program for the first quarter of 2013, Deputy Treasurer Eduardo Mendiola earlier said.

After the RTB sale, the government will embark on a domestic debt exchange program as part of its debt liability management strategy.

This will take place in December instead of November as earlier announced because banks asked for more time to prepare, according to Mendiola.

Under the plan, the government will exchange outstanding short-dated debt papers in the market with longer-dated ones.

Treasury officials said the government was looking at issuing a minimum of P60 billion for each of the following tenors: 7, 10, 15, 20 and 25 years.

The government currently has roughly P2.9 trillion in outstanding domestic debt, some of which are illiquid bonds or those that trade a lot less frequently than other bonds. – Rappler.com