The Bureau of Treasury (BTr) has fully awarded all bids for seven-year treasury bonds (T-bonds) yesterday, yielding P9 billion offer at 4.75 percent coupon rate.
Deputy National Treasurer Eduardo Mendiola said the market’s appetite for government debt instruments is fully seen on the full awarding of T-bonds.
There were 38 takers of the bonds, majority of which were banks, 33, and non-banks, three.    
There were P20.95 billion tenders during yesterday’s auction but only P9 billion were accepted because it was the amount programmed for acceptance, said auction committee chairman Undersecretary Gil Beltran of the Department of Finance.    
It was the first T-bond offering on seven-year tenor since April 24. Last April’s offering had a bit higher coupon rate of five percent as it was the most attractive for the secondary market, according to Mendiola.
At least 15 percent of the government’s P1.8-trillion budget for 2012 will be sourced from T-bond and Treasury bill offerings.
Mendiola said all coupon rates meant for acceptance by the BTr must be within the range attractive for the secondary market.
For the next three months, the BTr intends to float P63 billion worth of T-bonds with tenors between five to 25 years from July to September.
At least P9 billion of the total floatable bonds have been accepted last July 5.
For August, three T-bonds, with tenors of 10 years, 25 years and seven years, will be floated to generate at least P27 billion.
For September, 10-year and 20-year bonds are scheduled to be floated to generate P18 billion.                       
Beltran said the P63 billion worth of T-bonds will be fully awarded if the prescribed coupon rates are met.
Coupon rates for the T-bonds should be between 4.72 to 4.8 percent which are the most attractive to secondary markets.
Secondary markets are the dealers themselves, including individuals who want to buy government debt instruments rather than deposit money at banks that only give .65 to .75 percent annual interest.