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. Bill Auction

    Bill auction is a public auction for Treasury bills that is held ...
  2. Auction Rate

    Auction rate is the interest rate that will be paid on a specific ...
  3. Direct Bidder

    A Direct Bidder is an entity that purchases Treasury securities ...
  4. Auction

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

    A company that facilitates the buying and selling of assets, ...
  6. Call Auction

    A call auction is where participants buy or sell units of a good ...
Related Articles
  1. Investing

    Should you buy a house at auction?

    The traditional real estate market isn't the only place to conduct your home search. Auctions also bring many buying opportunities.
  2. Investing

    Explaining Dutch Auction

    A Dutch auction is a public offering auction.
  3. 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?
  4. 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.
  5. Managing Wealth

    Top Ways To Profit From Storage Auctions

    Here are some extremely valuable tips to help you become an expert at finding deals at storage auctions.
  6. 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.
  7. 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.
  8. Investing

    The Basics Of The T-Bill

    The U.S. government has two primary methods of raising capital. One is by taxing individuals, businesses, trusts and estates; and the other is by issuing fixed-income securities that are backed ...
  9. Insights

    Opinion: Get Ready for Donald Trump’s Electric Rates Shocker

    The obscure, but powerful, reasons you soon may be paying more for electricity.
  10. Investing

    The Treasury and the Federal Reserve

    Find out how these two agencies create policies to manage the economy and keep it on an even keel.
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. How are Treasury bill interest rates determined?

    Find out why interest rates for U.S. Treasury bills (T-bills) are determined at auction and how "competitive" bidders impact ... Read Answer >>
  3. Which economic factors impact treasury yields?

    Discover the economic factors that impact Treasury yields. Treasury yields are the benchmark yield for the rest of the world, ... Read Answer >>
Trading Center