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17th of July 2018


All bids for 10-yr T-bonds rejected

The Bureau of the Treasury rejected all bids for the P15 billion in reissued 10-year Treasury bonds it offered Tuesday.

“Submitted bids peaked at 7.625 percent, higher than the previous average rate of 6.35 percent at second reissue and secondary market rates,” the Treasury said in a statement.

When first issued in March, the coupon was only 6.25 percent.


The auction was also undersubscribed, as tenders totaled P14.84 billion.

Had the bids been accepted, the annual rate would have risen to 6.842 percent or up 49.2 basis points from the previous issuance.

As such, the total outstanding amount for the treasury bonds maturing on March 22, 2028 stayed at P22.07 billion, the Treasury said.

“The committee felt that the bids submitted are too high compared to where the market is in that sector of the curve. Had we fully awarded, the rates would have gone up about 50 basis points. And also considering that the auction is undersubscribed, we felt that it was just better to reject all the bids,” Deputy Treasurer Erwin D. Sta. Ana told reporters after the auction.

“Coming from the T-bill auction [last Monday], all demand actually focused on the shortest tenor. It just goes to show market appetite for shorter-dated securities at this time. We have said that inflation could be a factor, and all eyes are on the Thursday release of the inflation print,” Sta. Ana added.

Most economists see the headline inflation rate at a new more than five-year high in June to surpass the 4.6 percent last May.

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