What is 'Bill Announcement'

Bill announcements are published by the U.S. Treasury to announce the next bill auction. This announcement outlines the terms of the bill auction. Treasury bill announcements must contain the date and time of the auction, as well as the amount of bills to be tendered.

BREAKING DOWN 'Bill Announcement'

A bill announcement is released several days before a bill auction to kickstart the process. A bill auction is a public auction for Treasury bills that is held weekly by the U.S. Treasury. This is the manner in which all U.S. Treasury bills are issued. As of 2018, there are 23 authorized primary dealers that are required to bid directly upon each issue. A primary dealer is a pre-approved bank, broker-dealer or other financial institution that is able to make business deals with the U.S. Federal Reserve, such as underwriting new government debt.

The announcement includes information such as the auction date, issue date, amount of security that will be sold, bidding close times, participation eligibility and more. All auctions are open to the public through Treasury Direct or the Treasury Automated Auction Processing System (TAAPS). Treasury Direct is the online platform through which investors can purchase federal government securities directly from the U.S. Treasury. TAAPS is a computer network system developed by the Federal Reserve Bank to process bids and tenders received for Treasury securities.

Bill announcements must also post the settlement date of the bills, as well as the date of their maturity, CUSIP number and the minimum bid amount, in millions. Bill announcements are published weekly, corresponding with the next auction. The terms outlined in each announcement provide an indication of the demand for Treasury bills.

Bill Auction Participants

Participants in any Treasury auction consist of small investors and institutional investors who submit bids categorized as either competitive or non-competitive tenders. Non-competitive tenders are submitted by smaller investors who are guaranteed to receive bills, but they will not know what discount rate they will receive until the auction closes. In effect, these investors receive no guarantee on the price or discount received.

An investor who submits a non-competitive bid agrees to accept whatever discount rate is decided at the auction, determined by the competitive side of the auction which is handled as a Dutch auction. A Dutch auction is a public offering structure in which the price of the offering is set after taking in all bids to determine the highest price at which the total offering can be sold. The minimum non-competitive tender for a Treasury bill is $10,000. The non-competitive closing time for bills is normally 11:00 a.m. Eastern Time on auction day.

RELATED TERMS
  1. Auction

    An auction is a process where potential buyers place competitive ...
  2. Auction House

    A company that facilitates the buying and selling of assets, ...
  3. Absolute Auction

    An absolute auction is a type of auction where the sale is awarded ...
  4. TAAPS

    Treasury Automated Auction Processing System (TAAPS) is developed ...
  5. Reverse Auction

    A reverse auction is a type of auction in which sellers bid for ...
  6. Auction Rate Security - ARS

    An auction rate security (ARS) is a debt security that is sold ...
Related Articles
  1. Personal Finance

    Auction Rate Securities: Bidding On The Long Run

    These investments do better with a long-term horizon. Should you buy them before they're going, going, gone?
  2. Investing

    eBay vs. DealDash: Comparing Auction Sites (EBAY, PYPL)

    Learn how the bidding process works at DealDash and eBay, and discover the potential pitfalls when making bids at these auction sites.
  3. Personal Finance

    How The Auction Market Works

    Here's a look into the online auction market and how to get yourself the best value possible on sites like eBay and Quibids.
  4. Investing

    The Auction Method: How NYSE Stock Prices are Set

    Find out how the New York Stock Exchange (NYSE) runs an auction process known as open outcry to set stock prices during the opening and closing auctions.
  5. Investing

    Banks Take Extra $3.5 Billion Cash Ahead of Brexit

    As liquidity concerns grow for European banks heading into next week's Brexit vote, the Bank of England is holding additional Repo auctions to ensure banks have enough liquidity heading into ...
  6. Insights

    President Trump’s Old Ferrari Auctioned After Speed Bump

    A Ferrari formerly owned by Donald Trump—the only president to have owned a supercar—was auctioned for $270,000.
  7. Tech

    E&Y Auctioning Last of Seized Bitcoin from Silk Road

    Auditing firm Ernst & Young will be auctioning off the last of the pirate booty seized from the black market site once known as Silk Road.
  8. Investing

    Understanding Treasury Yield

    Treasury yield refers to the return on an investment in a U.S. government debt obligation, such as a bill, note or bond.
  9. IPF - Banking

    Procrastinator’s Guide to Bill Payment

    Learn how to avoid punishing late fees and keep your credit score intact with these 10 tips on paying your bills in a timely fashion.
  10. Trading

    Credit Default Swaps: What Happens in a Credit Event?

    The credit crisis of 2008 prompted important changes to the settlement of credit default swaps.
RELATED FAQS
  1. Treasury Bond vs Treasury Note vs Treasury Bill

    Understand the types of securities the government issues. Learn the difference between Treasury notes (T-notes), Treasury ... Read Answer >>
  2. Who uses bills of exchange?

    Find out who uses bills of exchange, why they are important in international trade and what happens when a bill is traded ... Read Answer >>
  3. How are treasury bills (T-bills) taxed?

    Lear how the Internal Revenue Service collects taxes on treasury bills (T-bills) purchased from the United States government ... Read Answer >>
Trading Center