Auction Process

Federal bonds, Federal notes, inflation-linked Federal bonds and notes, Federal Treasury notes and Treasury discount paper are usually issued by the Federal government in an auction process (tender process).

Only members of the Bund Issues Auction Group may acquire Federal securities directly within the framework of this tender process. The tender process takes place via the Bund Bidding System (BBS), which is provided as a technical platform by the Deutsche Bundesbank.

Submission of Bids

Federal securities will be issued by the Federal government to the members of the group of bidders in a multi-price auction process.

The minimum bid for Federal securities during the auction process must be at least € 1 mn or a whole multiple of it. In addition, the bids shall contain the price in per cent of the nominal amount at which the bidders are willing to acquire the offered Federal securities.

Bids may, in principle, be submitted at different prices or without a price indication. The prices offered must be a full 0.01 percentage points for Federal bonds and Federal notes (including inflation-linked ones), a full 0.005 percentage points for Federal Treasury notes and 0.00005 percentage points for Treasury discount paper.

Allocation & Retention Quote

The Federal government uses a multi-price auction process, i.e. bids accepted by the Federal government are allocated at the price quoted in the respective bid and are not settled at a single price. Bids that are above the lowest accepted rate will be fully allocated, while bids that are below the lowest accepted rate will not receive an allocation. Bids without a price indication will be allocated at the weighted average price of the accepted price bids. The Federal government reserves the right to reject all bids as well as to repair both the bids at the lowest accepted price and the bids without price indication, i.e. to allocate only a certain percentage.
In general, the Federal governement withholds a certain nominal volume at each auction (retention quote), which can be gradually released to the market after the tender process as part of secondary market activities. The amount of the retention quote varies from auction to auction, but has been below 20 % of the issuance volume on average since 2006:

Retention quote2021202020192018201720162015201420132012

(accum., in % of auction volume)

17.120.822.119.420.721.518.416.016.718.9

Auction Dates

Federal securities are issued via the BBS on different weekdays, which are depending on the type of Federal security. The auctions last from 8:00 am to 11:30 am.

  • Placements of Treasury discount paper (money market) are regularly carried out on Mondays.
  • Inflation-linked Federal securities, Federal Treasury notes and Federal notes are always issued on Tuesdays.
  • The tenders for nominal-interest Federal bonds with a maturity of 10 years or more are always held on Wednesdays.

The Deutsche Bundesbank announces the auction of a Federal security, including issuance volume and maturity, by means of a press release six banking days before the tender date. Likewise, in the form of a press release, the coupon and the interest rate date are announced one day in advance on the basis of the public invitation to tender.
On the auction day itself, the members of the bidding group can submit their bids for the tender from 8:00 a.m. to 11:30 a.m. Frankfurt time electronically via the BBS. The allotment decision will be made by Finance Agency immediately after the end of bidding and communicated to the bidders via the BBS. Subsequently, the result will be published via news information services and on the website of the Finance Agency.

Standardised procedure for the issuance of a Federal security, starting with the announcement in the issuance calendar until the value date of the tender amount. When issuing an inflation-indexed German Government security, the announcement period for the tender is not fixed at six bank working days before the tender, but can be handled flexibly by the Federal government.