T-bonds and T-bills sale auction

All T-bond and T-bill sale auctions are carried out in uniform price formula.

Till the end of 2011 auctions of Treasury Securities (TS) were held in the multiple-price auction system i.e., each of the bidders bought securities at a price submitted in his bid. In the case of uniform price auction all successful bidders pay for purchased securities the uniform price equal to the minimum accepted price. Buy-back auctions are conducted according to previous rules.

Investors may place non-competitive bids on T-bond and T-bill sale auctions. Non-competitive bids are the purchase declarations where investors only determine the number of securities they intend to buy without giving their price. Investors placing this kind of bids pay for the purchased securities price equal to the minimum price set at the given auction. Auction participants are allowed to place one non-competitive bid on a given auction (applies also to bids on supplementary auction). The predicted share of non-competitive bids in the total sales value on a given auction is 15%.

Bids are submitted by Treasury Securities Dealers (TSDs) to the National Bank of Poland by 11:00 a.m. on the auction date. Upon receipt a bid summary from the NBP the Minister of Finance takes a decision on accepted minimum price for TS with given maturity. Bids with higher price are accepted in whole while bids presenting accepted minimum price can be accepted with a reduction or in whole. In case of T-bonds reduced bids are rounded up to the nearest multiple of 1000. In case of T-bills reduced bids are rounded up to the nearest multiple of 10. The number of securities in every bid after reduction and rounding can not be greater than the number of securities specified in the offer. Rounding rule applies to all reduced bids at sale, supplementary, switching and buy-back auctions. 

Additional sale of Treasury Securities

Starting from 2019 the Minister of Finance resigned from previously organized TS supplementary auctions and gave TSDs the right to submit bids at additional sale. Additional sale  for T-bond is effective from January 1st and from June 1st for T-bills. TSDs, that purchased TS at the sale auction, have the right to purchase on the auction day additional TS, within additional sell, at the (minimum) price set at the sale auction.

Each TSD, that purchased TS at the sale auction, during additional sale have the right to purchase any TS offered at the sale auction in the amount that will be calculated as a product of total nominal amount of all TS purchased by a given TSD at the sale auction and a percentage multiplier that corresponds to the position taken by the TSD in the latest TSDs ranking published by the Ministry of Finance. The amount will be rounded to the nearest multiple of PLN 1mn. Minimum face value of the bid for T-bonds at additional sale amounts to PLN 1,000 and for T-bills to PLN 10,000. Bids at additional sale are submitted within the time period specified in the announcement published after the sale auction.

Total face value of all bids set at additional sale of a given TSD should not exceed the maximum amount which a given TSD is entitled to purchase during additional sale. Bid that exceeds that amount will be rejected. Minister of Finance will announce the multipliers which correspond to appropriate position in the TSD ranking, as well as the TSD ranking for a given quarter. The ranking will be prepared in accordance with the Rules and Regulations Governing the Activities of the Treasury Securities Dealer.

Treasury Securities Dealers ranking together with the corresponding multiplier

Schedule of TS sale auction and TS additional sale is presented in the table below.

Treasury bond switching auction.

At switching auction the Minister of Finance buys back bonds with near redemption dates before their maturity date, while the settlement of the transaction is effected by giving the bondholder new bonds of a different series. Bought-back securities are cancelled. The operation is conducted without cash flows. The Minister's of Finance goals of such an operation include:

• reduction of debt refinancing risk,
• increase in the value of benchmark issues of bonds,
• closing of small and with low liquidity issues of marketable and non-marketable bonds,
• managing the interest rate risk.

Treasury bond switching auction are carried out in uniform price formula. The Minister of Finance determines the minimum price of T-bonds sold, which is a settlement price for all accepted bids for bonds of a given maturity.

Investors may place one non-competitive bid, determining amount of bought-back bonds without giving price of settlement bonds. The share of non-competitive bids in the total sale value will be announced in the information on given auction according to the similar rules as in the case of sale auctions (currently stands at 15%).

Auction participants who have purchased bonds on switching auction are entitled to purchase additional bonds in number representing the difference between the sum of the purchased securities of a given series and its rounding up to the nearest multiple of 1000 (cash purchase).

Starting from January 1st, 2019 model of global uniform price formula at switching auctions is introduced, which ensure that all Settlement bonds of a given maturity will be acquired by investors at the same price (regardless of Source bonds).

Schedule of T-bonds switching auction in day T is presented in the table below.