The national government completed the initial phase of the latest retail bond offering targeted at local small investors, the Bureau of the Treasury said.
The treasury bureau sold an initial P221.22 billion in three-year retail bonds at a coupon rate of 2.375 percent. Total bids for the papers reached P284.18 billion, well above the P30 billion offer for the price-setting auction yesterday.
The latest retail treasury bonds (RTBs)—the government’s first issuance this year—will be offered to the general investing public in minimum denominations of P5,000 until March 4 this year.
The target settlement date is on March 9, the treasury notice stated.
National Treasurer Rosalia De Leon said “oozing liquidity” in the local market along with investors flight to safe haven amid volatility drove strong demand for RTBs.
“It offers better yield than time deposit, safe and low risk,” de Leon told reporters in a mobile phone message. “Also, the biggest reward is contributing to recovery and nation building.”
Proceeds from retail bond issuance will be allocated to government efforts in helping the country mitigate the impact of the coronavirus pandemic and support the sectors most affected by the ongoing pandemic.
Aside from fresh investments, participants of this RTB tranche will also get the opportunity to swap their old bonds maturing this year for the new debt papers.
De Leon said she expects the good yield would encourage current holders to swap and get better returns.
“The purpose of the invitation is to present a reinvestment opportunity for holders of eligible bonds given its forthcoming maturity dates,” the treasury said.
“The exchange offer is likewise intended to manage refinancing risk in the debt portfolio of the Republic and is an integral part of its overall liability management program,” the agency added.
Eligible bonds for the debt swap offer include fixed rate treasury note (FXTN) 07-57 maturing on March 20, FXTN 10-53 maturing on April 28, RTB 03-09 maturing on June 13, RTB 10-03 maturing on October 20, and FXTN 10-55 maturing on November 24.
This retail bond offer will be the eight of its kind made during the Duterte administration.
The first was in September 2016; the second and third in April and November 2017, respectively; the fourth in May 2018; the fifth in February 2019; the sixth and seventh in January and August 2020.