The Bureau of the Treasury made a full award on the 10-year treasury bonds auctioned yesterday amid healthy market demand.
The reissued IOUs was nearly 1.5 times oversubscribed, attracting tenders of P29.3 billion.
The committee was able to raise the full P20 billion of the programmed offering.
“Typically if the interest are falling, the tendency is to go for yield pick up, so the longer tenors will give you that yield pick up. Although here it’s almost 1.5 (times oversubscribed). We saw that there’s definitely demand for the tenor,” Erwin Sta. Ana, deputy treasurer, said after the auction yesterday.
The government securities fetched an average of 4.617 percent, 42.1 basis points higher than the previous rate of 4.196 percent, but lower than the secondary market Bloomberg Valuation (BVAL) rate of 4.683 percent.
“We saw that the 10-year rate is actually at its lowest sometime in August this year and after August it has actually picked up. So now we’re just a bit stable on the 10-year so hence, we saw that it is really the rate that is acceptable for the 10-year auction,” Sta. Ana said.
“Full award, weighted average of 4.617 percent is still lower than the BVAL. So the committee decided to award it full,” he added.