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How Auctions Are Conducted

Singapore Government Securities (SGS) bonds, Treasury Bills (T-bills), Cash Management Treasury Bills (CMTBs), MAS Bills and MAS Floating Rate Notes (FRN) are issued via auctions, which are held according to the annual issuance calendar. Find out how the auction process works. 

Auction Process and Timeline

Each SGS (comprising SGS bonds, T-bills and CMTBs), MAS Bills or MAS FRN auction follows several steps: announcement, auction, results and issuance. The relevant dates for all auctions are published in the issuance calendar.

Announcement

Announcement

The auction announcement includes information such as:

  • Amount of the security on offer.
  • Auction date and closing times.
  • Issue date.
  • Other terms and conditions of the offering.
  Once an auction is announced, you can submit your bid for the security you want to buy through a primary dealer.
Auction

Auction

When: SGS bonds and T-bills – 5 business days after the announcement; CMTBs, MAS Bills and MAS FRN – 1 business day after the announcement

All bids need to be submitted by noon on auction day.

Only primary dealers can submit bids to MAS at auctions via eApps.

Underwriting Requirement
Yes. Each primary dealer is obliged to tender for an equal share of the issue on offer.
Post-auction Subscription
No
Cut-off Time
By noon on auction day.
Note: For individual investors, applications for SGS through ATMs and internet banking typically close 1 to 2 business days before the auction. Check with your bank for the exact cut-off time.
When-issued Trading
Yes
Coupon Payments for SGS Bonds and MAS FRN
Every 6 months, starting from the month of issue. Paid on the first business day.
Result

Result

When: About 1 hour after the auction

The auction results include information such as:

  • Average and cut-off prices and yields/spreads.
  • Percentage of applications allotted at cut-off.
  • Total amount of the security applied for and allotted.
Issuance

Issuance

When: SGS bonds, T-bills, MAS Bills and MAS FRN - 3 business days after the auction; CMTBs – 1 business day after the auction

SGS, MAS Bills and MAS FRN are scripless.

For individual investors, your holdings will be reflected:

  • For cash applications, in your CDP statement.
  • For SRS application, in the statements from your SRS Operator (DBS/POSB, OCBC and UOB are SRS operators).
  • For CPFIS-OA application, in the CPFIS statement sent by your agent bank (DBS/POSB, OCBC and UOB are CPFIS agent banks).
  • For CPFIS-SA application, in your CPF statement.

For institutional investors, your holdings will be reflected in your custody account.

Who Can Take Part

SGS bonds and T-bills auctions are open to all institutions and individuals, including non-residents.

  • There are three categories of SGS bonds – SGS (Market Development), SGS (Infrastructure), and Green SGS (Infrastructure). MAS may participate in SGS (Market Development) auctions on a non-competitive basis. The SGS (Market Development) purchased is used in money market operations via repos.
  • Any amount that MAS plans to apply for is announced to the market before each auction. In addition, MAS may increase or decrease the amount it purchases based on the auction safeguard mechanism.

CMTBs, MAS Bills and MAS FRN auctions are open to institutional investors only.

Method of Sale

SGS, MAS Bills and MAS FRN are issued via a uniform-price auction. Successful bids will be allotted the securities at a uniform yield, which is the highest accepted yield (or cut-off yield) of successful competitive bids submitted at the auction.

Refer to the following table to find out the bid type(s) accepted at each auction.

SGS bonds  T-bills CMTBs MAS Bills MAS FRN

Non-Competitive Bid

Yes

Yes

No

No

No

Competitive Bid

Yes

Yes

Yes

Yes

Yes
Non-competitive Bid

Non-competitive Bid

In a non-competitive bid, you only specify the amount you want to invest, not the yield. Choose this if you wish to invest in the bond regardless of the return or are unsure of what yield to bid.

Non-competitive bids will be allotted first, up to 40% of the total issuance amount. If the amount of non-competitive bids exceeds 40%, the bond will be allocated to you on a pro-rated basis. The balance of the issue amount will be awarded to competitive bids from the lowest to highest yields.

You will get the bond at the cut-off yield, which is the highest accepted yield of successful competitive bids.
Competitive Bid

Competitive Bid

If you wish to invest in the bond only if it yields above a certain level, submit a competitive bid. You can specify the yield you are willing to accept in percentage terms, up to 2 decimal places.

Note that you may not get the full amount that you applied for, depending on how your bid compares to the cut-off yield.

Tip: A lower yield represents a more competitive bid, as you are indicating that you will accept a lower interest rate. You can submit multiple competitive bids.

Allotment Limits

For each SGS auction, the following allotment limits apply:

  • Each primary dealer will be allotted a maximum of 30% of the issuance size. This includes the allotment under competitive and non-competitive bids.
  • Each non-primary dealer will be allotted a maximum of 15% of the issuance size. This includes the allotment under competitive and non-competitive bids.

A maximum of 40% of the issuance size will be allotted to non-competitive bids. If the total amount of non-competitive bids exceed this limit, the allotment will be on a pro-rated basis. In addition, the following limits will apply for non-competitive bids:

  • For each primary dealer, the maximum allotment for non-competitive bids is 1% of the issuance size.
  • For each non-primary dealer, the maximum allotment for non-competitive bids is:
    o S$2 million per SGS bond auction;
    o S$1 million per T-bills auction.
  • If a primary dealer enters a bid on behalf of a client, the client is subject to the non-primary dealer limit of S$2 million per SGS bond auction or S$1 million per T-bills auction.

Allotment limits are not imposed on MAS Bills and MAS FRN auctions.

Auction Safeguard: SGS Bonds

Although SGS bonds auctions are fully underwritten by primary dealers, the SGS market is not immune from global developments.

The auction safeguard mechanism allows MAS to vary its subscription amount to offset unexpected changes in investor demand. This makes the SGS bonds auction system more resilient.

How it Works

The auction safeguard mechanism takes place when the auction cut-off yield is more than 25 basis points below or above the market yield.

If that happens, MAS may subscribe for a lower amount in an unexpectedly strong auction, or a higher amount in an unexpectedly weak auction.

The auction safeguard thus helps to lower the risk of volatility or disorderly adjustments in the secondary SGS and broader Singapore dollar corporate debt markets.

Coupon Rate: SGS Bonds

The coupon rate for a newly issued SGS bond is the cut-off yield of successful competitive bids rounded down to the nearest 0.125%. The minimum coupon rate for SGS bonds will be 0.125%.

If the cut-off yield is higher than the coupon rate, the purchase price would be lower than 100% of the bid amount. The difference would be credited back into the individual investor's account.

Conversely, if the cut-off yield is lower than the coupon rate, the purchase price is higher than the bid amount, and the difference is debited from the account.

For CMTBs, T-bills and MAS Bills, there are no coupon payments; instead they are issued at a discount to the face (par) value. The discount rate is the cut-off yield at the auction. The interest is paid at maturity and is the difference between the purchase price and the face value.

For MAS FRN, the coupon rate is the cut-off spread of successful competitive bids added to the relevant Compounded SORA calculated based on the interest calculation methodology. The coupon rate is floored at 0%.

Interest Calculation: MAS FRN

MAS FRN will follow a 2-day backward shifted observation period methodology for calculation of interest. Under this convention, the observation period for the interest rate calculation starts and ends two business days prior to the interest period. The applicable day count for SORA will also be adjusted back by two business days.