BTr rejects ‘throw-away’
bids for 5-year papers
Government rejected all bids for five-year Treasury bonds at yesterday’s auction for "lack of serious buyers."
Buyers submitted a high rate of 4.873 percent or 24 basis points above the last time the same debt papers with the same tenor were issued.
The auction panel of the Bureau of the Treasury (BTr) described the offers submitted as "throw-away" bids.
Tenders reached P8.695 billion, which was slightly higher than the P6 billion bond-offering.
Deputy Treasurer Eduardo Mendiola said: "The GSEDs (government securities eligible dealers) were not bidding to win. Their participation was only for compliance as they are obligated to join government auctions," Mendiola, who chaired the last auction for the year, said.
Five-year debt papers at the secondary market sell at 4.25 percent or below what buyers were asking for yesterday’s five-year papers on offer.
Mendiola said the government rejected the bids since they were not at par with rates in the secondary market.
"It (4.25 percent) was still 9.6 basis points higher and we were only willing to award P425 million. Hence, unacceptable," he said.
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