Gov­ern­ment of Trinidad and To­ba­go bonds con­tin­ue to be very at­trac­tive to in­vestors in a low in­ter­est rate en­vi­ron­ment with the most re­cent of be­tween $2 and $2.5 bil­lion re­ceiv­ing bids amount­ing to $5.6 bil­lion, the Cen­tral Bank said in a no­tice on Thurs­day. The over­sub­scribed bond, which is for 15 years at a fixed in­ter­est rate of 5.2 per cent, closed on Thurs­day.

Ac­cord­ing to the Cen­tral Bank's no­tice: "Due to this over­whelm­ing re­sponse, the bond was up­sized to ac­cept a to­tal of $2.5 bil­lion as pro­vid­ed for in the In­for­ma­tion Mem­o­ran­dum. The bond was al­lot­ted at a pre­mi­um, with a clear­ing price of $113.44 per $100 face val­ue, of­fer­ing in­vestors a yield to ma­tu­ri­ty of 4 per cent."

This means that in­vestors were pre­pared to pay a pre­mi­um of $113.44 per $100 face val­ue and that the bond was pro-rat­ed to al­lo­cate ap­prox­i­mate­ly 47.55 per cent of the amount ap­plied for, while com­pet­i­tive bids sub­mit­ted at a price low­er than this were re­ject­ed. Of the $2.5 bil­lion raised by the Gov­ern­ment, some $38.3 mil­lion was al­lo­cat­ed to non-com­pet­i­tive bid­ders, who are nor­mal­ly those bid­ding for $100,000 or less.

The Gov­ern­ment raised the bond to fi­nance the clos­ing off of its ac­counts for the 2012 fis­cal year, which ends on Sun­day. In a state­ment, the Cli­co Pol­i­cy­hold­ers Group said that it was not sur­prised by the over­whelm­ing re­sponse of the fi­nan­cial com­mu­ni­ty in­clud­ing in­di­vid­ual in­vestors, giv­en the dearth of pub­lic Gov­ern­ment of the Re­pub­lic of Trinidad and To­ba­go bond auc­tions and the sig­nif­i­cant liq­uid­i­ty over­hang that con­tin­ues to per­vade the sys­tem.

The lob­by­ing group said that it was "not over­ly con­cerned at this time" that the Gov­ern­ment's $2.5 bil­lion bond could have an im­pact on the price and/or val­ue of GORTT (Cli­co) 1-10 year Ze­ro-Coupon bonds. "But this sen­ti­ment could change with the ad­vent of fur­ther bond is­sues by the Gov­ern­ment. Ac­cord­ing­ly, we con­tin­ue to mon­i­tor the sit­u­a­tion and will be pay­ing close at­ten­tion to the Bud­get pre­sen­ta­tion on Mon­day. We are al­so ask­ing pol­i­cy­hold­ers who may wish to cash in their 1-10 year bonds but might not have done so as yet, to be very vig­i­lant go­ing for­ward," ac­cord­ing to the Cli­co Pol­i­cy­hold­ers Group.