|
|
 |
 PRESSROOM / NEWS
|
|
|
 | Republic of the Philippines
DEPARTMENT OF FINANCE
Roxas Boulevard Corner Pablo Ocampo, Sr. Street
Manila 1004
|
November 17, 2009
7-YEAR T-BOND AUCTION RESULTS: NOVEMBER 17, 2009
BTr
FPPO-JEP
The Bureau of the Treasury today rejected all the tenders for the reissued 10-year treasury bonds. Market players attempted to raise the yield, showing no interest for the debt paper as there were no other leads in the domestic front that can affect the movement of the interest rates but the budget deficit data for October that, on the other hand, can put upward pressure on the rates. The Department of Finance is scheduled to announce the government’s fiscal performance data for October tomorrow, which speculations are rife that budget deficit could now possibly breach the P250 billion budget cap set for this year amid increased public spending and the continued revenue weakness. For weeks, market players were persistently jittery over the health of government's finances particularly when the government’s budget deficit in the first nine months to September ballooned to P237.5 billion, already 95 percent, closing in against the full year target of P250 billion. Coming in at today’s auction, there was no incentive for the market players to throw aggressive bids thus they were seen asking for an unacceptable premium as a precaution given those speculations and higher projections of the budget deficit. Obviously cautiousness once again ruled among the market players as it appeared that there was lack of interest for the debt paper as manifested by the relatively thin volume today, with subscriptions only half of the total offering, indicating weak demand.
At today’s auction, the Auction Committee was supposed to auction P6.5 billion worth of the reissued 10-year T-bonds, with a remaining life of seven years. Had it made a full award, the debt paper would have fetched 7.376 percent, 37.6 basis points higher than the 7.0 percent coupon rate T-bonds of this tenor fetched during the RTB sale last September 15. This would have been 69.8 basis points higher when compared to the average rate of 6.678 percent during the said retail sale. The paper was undersubscribed with total tenders reaching P3.48 billion only. Bids ranged from 7.8 percent to 7.25 percent.
<< Back to List
|
|
