DEFINITION of 'Note Auction'

A formal bidding process that is scheduled on a regular basis by the U.S. Treasury. Currently there are 17 authorized securities dealers (primary dealers) that are obligated to bid on each issue. All Treasury notes are originally issued in this manner.

BREAKING DOWN 'Note Auction'

The amount of money bid by the highest bidder at these auctions will determine the interest rate paid on each issue. The primary dealers have the option of holding, selling or trading their issues after purchase. The demand for Treasury notes by these dealers will vary according to economic and market conditions.

  1. Bill Auction

    A public auction for Treasury bills that is held weekly by the ...
  2. Purchase and Resale Agreements ...

    An arrangement between the Bank of Canada and dealers whereby ...
  3. Indirect Bidder

    An entity that purchases Treasury securities at auction through ...
  4. Bid Wanted In Competition - BWIC

    A situation where an institutional investor submits its bond ...
  5. Privilege Dealer

    An individual or a securities firm that is registered as a market ...
  6. Primary Dealer

    A pre-approved bank, broker/dealer or other financial institution ...
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