T-bill auction opens to small investors
The government is offering small private investors another chance to enter an interest-bearing bond auction, in the context of Wednesday’s six-month treasury bill issue.
As with the 52-week T-bills at the beginning of the month, any individual who wishes to purchase the new 26-week debt can do so through a public registration at any bank or brokerage firm, with a maximum nominal amount for each individual at 15,000 euros.
A necessary condition for the purchase of the bills is their registration with the securities system (SAT). The registration period started on Tuesday and will end on Thursday.
The amount of the issue is €625 million and as usual Wednesday’s auction will take place with competitive offers from the main traders, while based on their operating regulations, the possibility of submitting non-competitive offers is provided both on the day of the auction and the following day (on Thursday).
Non-competitive bids will be accepted at the price of the last bid accepted at the auction, up to a total of 30% of the auctioned amount – i.e. up to €187.5 million for each of the above cases, with the drawdown amount being able to reach €1 billion euros, as is usually the case.
In the most recent six-month T-bill held on July 28, the yield was set at 3.8% and according to estimates the yield on new interest may move in the range of 3.8-4% – i.e. more than two-and-a-half times higher than the rate offered by one-year term deposits (1.5%) and 11 times higher than the weighted average rate of all new deposits (0.35%).
In addition, as is already known, the interest is tax-free, compared to the 15% rate on interest that would be taxed if the amount were in a time deposit.
However, the participation of small investors in the recent issue of one-year T-bills interest was limited. Kathimerini understands that only 4,200 individuals showed an interest, with offers of €57 million in total – that is, each paid approximately €13,000 on average. That was despite the fact that the yield was at a particularly attractive level – at 3.81%.
