Fri, Sep 17, 2010 - Page 11 News List

Central bank sells 10-year bonds at lowest yield ever

By Ted Yang  /  STAFF REPORTER

The central bank yesterday sold NT$40 billion (US$1.26 billion) in 10-year bonds at a yield of 1.228 percent — the lowest in its history — in an auction, indicating that liquidity in the market is still abundant.

The bank said in a statement that the sale of the securities — maturing on Sept. 21, 2020 — attracted bids for 1.86 times the amount of debt on offer, compared with 1.55 times for the sale of 10-year bonds in June. The bank was commissioned by the Ministry of Finance to auction the 10-year bonds.

MOST FOR DEBT

Of the total bonds scheduled to be issued on Tuesday next week, NT$35.4 billion will be used to finance the government’s debt and the remaining NT$4.6 billion to cope with special budget needs, the finance ministry said in a separate statement.

The banking industry accounted for 50.87 percent of the winning bidders, followed by the securities sector at 39.25 percent, the insurance industry at 5 percent, and the bill sector at 4.88 percent, data showed.

BUDGET NEEDS

The ministry said in June that it intended to sell a total of NT$120 billion in treasury bonds in the third quarter of the year to help repay the government’s debt and meet general and special budget needs aimed at boosting economic recovery.

The government issued NT$40 billion in five-year bonds at a yield of 1.011 percent on July 20 and NT$40 billion in 20-year bonds at a yield of 1.789 on Aug. 12, the central bank’s statistics showed.

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