Gov't cancels 2 domestic borrowings

Posted at 10/11/12 4:20 PM

MANILA, Philippines - The government has cancelled its P16.5 billion domestic borrowings this month, the Bureau of Treasury said. This was in light of the ongoing retail bonds sale targeted at small investors.

In a notice to dealers, Deputy National Treasurer Eduardo S. Mendiola said the auctions of Treasury Bills and the 7-year longer-dated notes scheduled on October 15 and 23 have been canceled.

Mendiola said the cancellation was aimed at making sure there will be an orderly settlement of the 25-year peso denominated retail treasury bonds public offering from October 9 to 22.

At the auction on Tuesday, there was strong investor demand for the longer-dated debt, with tenders reaching P76.5 billion, allowing the government to raise close to P63 billion.

The record for a retail bond sale was P180 billion in February.

"We can see that there is so much demand and we will try to accommodate all investors who would want to invest as much as possible within the two week offering period," Mendiola said.

"If we get a lot (of demand), then we will probably have to reduce some of our regular issues. We will decide next quarter."

The government set the coupon rate for the 25-year retail T-bond at 6.125%, slightly lower than secondary market yields for similarly dated paper.