Govt sells P20-B RTBs in first auction for 2011

The government on Tuesday sold P20 billion of retail Treasury bonds (RTBs) in a rate setting auction that marks the start of its latest debt offer to investors. “It’s a very good auction. Demand is robust," National Treasurer Roberto Tan told reporters after the auction. The five-year bonds fetched a 6 percent coupon rate, or just 52 basis points off the 6.52 percent secondary market rate, Tan said. Tenders totaled P31.093 billion, compared to the P10 billion the government offered for this type of debt paper. For its 10-year bonds, the government sold another P10 billion at a coupon rate of 7.375 percent with total bids reaching P20 billion. The comparable rate for 10-year bonds in the secondary market is 7.71 percent. “The rates are more attractive now compared to other RTBs. Demand can easily reach P80 billion," said Juanchito Dispo, executive vice-president of First Metro Investment Corp. (FMIC), one of the underwriters for the auction. The issue coordinators for the sale are Land Bank of the Philippines, Development Bank of the Philippines, BPI Capital Corp., Metropolitan Bank & Trust Co., and FMIC. The demand may go as high as P100 billion as government-owned and -controlled corporations are expected to buy P20 billion. Dispo said, however, it was up to the government if it would heed the demand and issue up to P100 billion worth of the paper. “Let’s cross the bridge when we get there," he said. FMIC would recommend a daily volume of P10 billion or P5 billion for each paper, the EVP said. RTBs are part of the government's savings program to make government securities available to retail investors and create savings consciousness among Filipinos. The minimum amount investors may buy is P5,000. — VS, GMA News