BTr exec expects high demand for RTBs
MANILA, Feb. 22 (PNA) — Deputy Treasurer Eduardo Mendiola expects large demand for the government’s retail treasury bond (RTB) that will be sold during a price setting auction Tuesday.
The Bureau of the Treasury (BTr) expects to sell at least P40 billion worth of 15 and 20-year RTBs from February 21-29. Issue date is March 1, 2012.
“It should have a high demand because we’re now paying the public about more than P90 billion in terms of maturity,” Mendiola said.
The BTr executive said maturing debt paper this week include P88.4 billion worth of bonds and P7 billion worth of Treasury bills (T-bills).
He hopes that issuance of the first RTB sale this year would surpass the P110 billion sold in October last year given the maturities this week as well as the high liquidity situation in the economy.
“There is a big maturity and people have money so we would like to provide them an investment option,” he said.
Mendiola said rates of the RTBs would be aligned with the secondary market since these are market-determined.
The government has tapped BDO Capital Corporation, BPI Capital Corporation, Deutsche Bank AG Manila Branch and First Metro Investment Corp. as Joint Issue Managers while China Banking Corporation, Development Bank of the Philippines, Land Bank of the Philippines and Philippine National Bank as Joint Issue Coordinators for this debt sale.
A general investors’ briefing will be held for the RTB sale tomorrow at 3:00 p.m. in Ballroom A & B of Makait Shangri La.
Meanwhile, the BTr official said the Treasury has lowered the minimum award for debt paper dealers to P300 million from P500 million to enable these entities to qualify as selling agents for RTBs.
“We are lowering it to P300 million so that more (dealers) can participate as selling agents,” he said.
Mendiola explained that the decision to lower the minimum award requirement was made after some small players appealed for this because the P500 million “was too much for them.”
Relatively, the BTr official said they have not decided on the limit for daily issuance until February 29 as this would only be decided, with the transaction arrangers and coordinators, after the price setting auction tomorrow.
“We have to divide it equally to give everybody a chance to distribute,” he said.
“We will give opportunities to those who have maturities to reinvest their money back to a high yielding, risk free, investment. This is not a fund-raising activity. This is providing investment opportunity for those who are getting maturities,” he added.
In line with the RTB sale, the BTr has cancelled the auction of P9 billion worth of 10-year Treasury bond (T-bond) next week. (PNA)
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