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The Primary Market
Calling of auctions
Auctions are called by Resolution of the General Directorate of the Treasury and Financial Policy, specifying the following details:
- 1. the issue and redemption dates of the Debt securities in question
- 2. date and latest time for lodging bids with the Bank of Spain
- 3. allocation date
- 4. settlement date
- 5. date and latest time for payment of the securities allocated
- 6. nominal amount offered (discretionary)
- 7. minimum nominal amount of bids (where appropriate)
- 8. the possibility or otherwise of submitting non competitive bids
- 9. in the case of Bonos and Obligaciones:
annual nominal interest rate and coupon payment dates - annual nominal interest rate and coupon payment dates
- 10. the "special" nature of the auction (where appropriate)
- 11. any additional conditions applying.
- In Bonos and Obligaciones auctions, the technique used is aggregation, orissuance by tranche, whereby the issue of a determined security is kept open over several consecutive auctions (three at least). The securities allocated at such auctions are fungible, by virtue of sharing the same nominal coupon and the same interest payment and redemption dates. When the total nominal amount issued reaches 10 to 15 billion euros approximately, the corresponding securities code is closed and a new one opened.
Also in the case of Bonos and Obligaciones,a series of placement objectives are set for auctions in consultation with Market Makers, thereby helping to stabilise financing flows. These objectives are set prior to each auction, on T-2 for Wednesday auctions and T-3 for those held on Thursdays. Objectives refer both to the amount targeted and the maximum amount to be issued, and are binding as regards first-round issues. Minimum issue amounts are also set, currently €180 million for 3- and 5-year Bonos, and €90 million for 15- and 30-year Obligaciones.
