3-Month Bill Auction

The 3-month bill auction reports the 3-month tranche of the European Union's wholesale supranational EU-Bills auctions. EU-Bills are short-term EU debt maturing in under one year, while EU-Bonds cover longer maturities. The European Commission launched the bills programme in September 2021 as part of its diversified funding strategy. Since January 2023 the programme has run under the unified funding approach, and it records only primary auction outcomes.

Auctions take place twice a month as a rule, on the first and third Wednesday. August usually has a single auction, a second December auction is optional, and the calendar stays indicative and subject to change. An announcement a few days before each auction states per tranche the ISIN, auction, settlement and maturity dates, and the maximum up-to volume.

Dealer bidding runs from 09:45 to 12:00 CET on auction day, only for Primary Dealer Network banks. Results appear the same day with the 6-month and 12-month tranches in the same fields, and each result is final with no revisions.

Each auction combines three maturity slices with demand and price fields inside every tranche.

• 3-month tranche: the shortest slice, usually a tap reopening an existing line, funding the short-term bridge and showing short-end cost and demand.
• 6-month tranche: the middle slice using the same tap method, showing cost and demand further out the short end.
• 12-month tranche: the longest bill slice, with new lines opened at the first monthly auction and taps after, anchoring the one-year money-market point.
• Demand and price fields: bid and allotment volumes, old and new outstanding amounts, and average and highest yields. They also show the share granted at the top yield and the cover ratio.

The first EU-Bills auction on 15 September 2021 raised €5 billion across two tranches. It sold €3 billion of 3-month bills due 3 December 2021. It also sold €2 billion of 6-month bills due 4 March 2022. Dealers bought through TELSAT and the bills were listed in Luxembourg for later trading, so the 3-month figure was one tranche of a two-slice day.

The bills serve as flexible bridge financing beside longer-term syndicated bond sales.

1. Announcement: The Commission announces the ISIN, auction, settlement and maturity dates and the maximum volume for each tranche. Only Primary Dealer Network banks may bid, and each dealer must take at least 0.05% of the volume on offer.
2. Bidding: On auction day dealers submit competitive bids through TELSAT between 09:45 and 12:00 CET.
3. Allotment and publication: The Commission allots up to the announced volume and publishes bids, allotment, and old and new outstanding amounts. It also publishes the average and highest yields, the share granted at the top yield, and the cover ratio.
4. Cover ratio: Cover C equals bids B divided by allotment A, and new outstanding equals old outstanding plus allotment, with no seasonal adjustment. Illustrative round numbers: bids of 2,400 with allotment of 1,500 give cover of 1.60, while old outstanding of 4,000 becomes 5,500 after adding 1,500.
5. Yields: The average yield is the allotment-weighted mean of accepted yields, and the highest yield is the marginal yield filled pro-rata at the top. For example, €900m at 2.60% plus €600m at 2.65% gives an average of 2.62%, with the top yield of 2.65% filled 100%.