Investors swamp 5-year RTB auction

The roadshow prompted the auction committee not to accept all the tenders during the rate setting auction, De Leon said. (Shutterstock photo)

MANILA — Banks on Monday swamped the Bureau of the Treasury’s (BTr) rate-setting auction for five-year Retail Treasury Bond (RTB) where PHP130-billion worth of debt paper was issued, higher than the PHP30 billion initial offering.

Coupon rate of RTB stood at 4.625 percent, lower than the 5.115 percent rate of the same tenor in the secondary market on Monday morning.

National Treasurer Rosalia de Leon said the nearly PHP19.181 billion tenders was a demonstration of the high liquidity situation in the domestic economy.

“It also reinforces our plan that our financing has an inward bias given that we see that we’re oozing with liquidity,” she told journalists after the auction.

BTr has scheduled an RTB roadshow from Nov. 20-23, 2017 in Manila; San Fernando City, Pampanga; Marco Polo Hotel in Davao City; Baguio Country Club, Baguio City; Lima Park Hotel, Malvar, Batangas; Radisson Blu Hotel, Cebu City; Grand Xing Imperial Hotel, Iloilo City; and Mallbery Suites, Cagayan de Oro City.

The roadshow prompted the auction committee not to accept all the tenders during the rate setting auction, De Leon said.

She said the offer period would be until the 29th of the month, thus, there is a need to allocate for the retail investors during this time.

“If you go for PHP150 (billion), you have to accept the higher rate of 4.75 percent because that is the cut-off,” she said.

During the auction, the committee mulled several issuance volume —  from PHP60 billion to PHP150 billion, with rates ranging from 3.979 percent to 4.555 percent.

De Leon is optimistic that demand for the debt paper will remain strong in the coming days because of the positive results during the rate setting auction.

“We still see there’s a lot of demand,” she added.

RTBs are intended for retail investors since minimum placement is PHP5,000 and increments are at PHP5,000.

BTr tapped state-owned Development Bank of the Philippines (DBP) and Land Bank of the Philippines (Landbank) as joint lead issue managers for the government’s 20th RTB issuance while joint issue managers are BDO Capital & Investment Corporation, BPI Capital Corporation, China Bank Capital Corporation, First Metro Investment Corporation, and SB Capital Investment Corporation.

The public can avail of the RTBs through the 16 qualified selling agents namely Banco de Oro Universal Bank (BDO), BDO Capital & Investment Corporation, BPI Capital Corporation, China Banking Corporation, Citibank N.A., DBP, Landbank, Metropolitan Bank & Trust Company (Metrobank), Philippine Bank of Communications (PBCom), ING Bank, FMIC, Philippine National Bank, Rizal Commercial Banking Corporation (RCBC), Robinsons Bank Corporation, Security Bank Corporation (Security Bank), and United Coconut Planters Bank