Treasury discount paper ("Bubills")
Maturity: 6 or 12 months
Income: difference between par value and purchase price
Redemption: at par value
Price risk: very low
Issuer risk: very low
With maturities of up to twelve months, Treasury discount paper (Bubills) are the Federal Government's money market paper. Between 2017 and 2019 only Bubills with maturities of 6 months have been issued and partially been reopened. Starting in the second quarter of 2020, Bubills with a 12-month maturity will be issued again in a monthly pattern.
Bubills as a proportion of total Government debt currently in circulation
The Federal Government's money market paper with original maturities of 6 and 12 months form a key element of the Federal Government's annual issuance plan. Of all German Government securities, they enable the Federal Government to react most flexibly to short-term changes in financing requirements.
By taking the approach of solely issuing six-months Bubills since 2017 the Bund returned to its issuance structure, it practiced till 2008 in the money market.
Furthermore, in 2020 the issuance approach introduced and established in 2018 was initially intended to be continued and expanded. Every month (prior every two months), new issues of Bubills with a volume of € 3 bn were planned. After one month each issue was considered to be reopened by € 1.5 bn, the Bubills issued in the first month of a quarter to be tapped for a second time after 3 months by € 2 bn, each.
Due to the short-term increase in the Federal government's financing requirements, the auction planning of money market paper was the most heavily modified:
For the time being, the new issue and reopening pattern for 6-month Bubills will be maintained. However, all auction volumes will be increased to € 4 bn in the second quarter of 2020.
In addition, Bubills with a 12-month maturity will be issued again for the first time since 2016.
Starting in April, new issues are to be increased after one, three, six, seven and nine months. In preparation for this reopening pattern, only in the second quarter one Bubill with a term of 11 months and two with a term of 9 months and a volume of EUR 4 billion, each, are also scheduled as new issues.
From 20 April 2020, multi-ISIN auctions will also be used, which the Federal Government has already established for inflation-linked Federal securities. Six multi-ISIN auctions, each with two Bubills, are planned for the second quarter. Five existing issuance dates will be used for this purpose, plus a new date on 4 May 2020. A further Bubill auction not announced in the previous calendars will be held on 29 June 2020.
On an annual basis, these adjustments in the second quarter will lead to a total issuance volume of € 118.5 bn, € 56.5 bn higher than the annual preview of € 62 bn. This represents more than the triple of previous year’s issuance volume and now amounts to more than 40 % of the total auction volume across all securities (without inflation-linked), compared to 21 % in 2019.
|Annual volume in € bn||2019 |
|Q2 2020 |
|Bubill 6M auction volume||43||62||82.5|
|Bubill 12M auction volume|| |
Bubills as a proportion of total issuance volume in 2020
At year-end 2019 Bubills made up € 15 bn of German Government securities outstanding in the secondary market (incl. inflation-linked securities). Their relative share remained around previous year’s level of a bit more than 1 %. Bubills also accounted for 1.4 % (€ 69 bn) of the trading volume of German Government securities of the reporting member banks in 2017. In 2018 their share increased slightly to 1.8 % (€ 84 bn).
Currently tradeable Treasury discount paper
|No security was found.|
|12M Bubill||20.01.2021||-||4,000 € m||20.04.2020||DE0001030294|
|12M Bubill||03.02.2021||-||4,000 € m||04.05.2020||DE0001030310|
|12M Bubill||03.03.2021||-||4,000 € m||27.04.2020||DE0001030302|
|12M Bubill||14.04.2021||-||8,000 € m||25.05.2020||DE0001030203|
|12M Bubill||05.05.2021||-||4,000 € m||18.05.2020||DE0001030211|
|Bubill||10.06.2020||-||4,500 € m||20.01.2020||DE0001137834|
|Bubill||08.07.2020||-||8,500 € m||20.04.2020||DE0001137842|
|Bubill||05.08.2020||-||8,500 € m||04.05.2020||DE0001137859|
|Bubill||09.09.2020||-||7,000 € m||27.04.2020||DE0001137867|
|Bubill||07.10.2020||-||8,000 € m||25.05.2020||DE0001137875|
|Bubill||04.11.2020||-||4,000 € m||11.05.2020||DE0001137883|