National Treasury sets coupon rate on 5.5Y retail dollar bond at 5.750%

The Bureau of Treasury set at an auction Wednesday the coupon rate on the retail onshore US dollar bond it will offer to the public at  5.750 percent.

The yield was far higher than the 1.375 percent set for 5-year retail dollar bond offer in 2021. Over the last two years, interest rates have risen sharply because of the Bangko Sentral ng Pilipinas’ efforts to tame inflation.

The initial amount offered was $200 million for the 5.5-year bond, which attracted tenders totaling $636.2 million. The BTr accepted $611.2 million in bids to cap the coupon rate.

Proceeds from the bond sale will be used for budget support.

The public offering also starts Wednesday and will end on 6 October. The bond will be issued on 11 October and will mature on 11 April 2029.

The 11 selling agents include BDO Capital and Investment Corp., Bank of the Philippine Islands, China Banking Corp., Development Bank of the Philippines, First Metro Investment Corp., HSBC, Metropolitan Bank & Trust Co., Philippine National Bank, Security Bank Corp., Land Bank of the Philippines, and Union Bank of the Philippines. 

In 2021, the government raised $1.5 billion from the sale of 5- and 10-year retail dollar bonds, nearly double the original offer size of $886.2 million. The minimum investment was around $300 for retail investors, with additional investment set at a minimum $100. The coupon rates were set at 1.375 percent for the 5-year paper and 2.250 percent for the 10-year bond.