New Issues - US Gov't and Agency Underwritings Flashcards
Treasuries are sold ______ by the Fed Reserve
at auction - termed “yield auctions”
Weekly treasury auctions are held for the following notes:
- 4 week
- 13 week
- 26 week
Monthly auctions for t-bills are held for:
- 52 week (monthly on Tuesday)
- treasury notes
- bonds
- TIPS
Two types of bids may be tendered at auction:
- competitive bids
- non-competitive bids
Competitive bidders are typically:
“primary” US gov’t securities dealers
Bids are accepted to ____ decimal places
2 decimal places
Non-competitive bids ____ specify an interest rate and are filled at the ______ rate
do not specify a rate, are filled at the average of the winning competitive bids (small, non-institutional investors)
Monday auctions will issue bills on ______
thursday of the same week
Payment for bills is made in ____,_____, or ______
cash, fed funds, or similar maturing t-bills
If paid in t-bills, the amount needed is =
$100 face value - discount specified for that winning bid
The min and max non-competitive bids are:
$100 and $5,000,000 per bidder
Min and max competitive bids are:
$5,000,000 and no max (although limit per dealer is set at 35% of the total issue)
The coupon rate for t-notes, bonds, and TIPS is set using the _______
average bid (set a little lower than the avg yield so that notes are issued at a slight discount to par)
Notes are paid for on the date of _____, not the date of ______
issuance, not the date of auction
Dates of issuance are the ______ for t-bills and the _____ of the month for notes, bonds, and TIPS
thursday, 15th of the month
