bid-to-cover ratio

(redirected from Bid to Cover Ratio)

Bid-to-cover ratio

The ratio of the number of bids received in a Treasury security auction compared to the number of accepted bids.

Bid-to-Cover Ratio

In the auction of U.S. Treasury securities, the ratio of the bids received in the auction to the number of bids actually accepted. The bid-to-cover ratio is an indicator (though not the only one) of relative demand for Treasury securities. A bid-to-cover ratio of over 2.0 indicates a successful auction with competitive bidding, while a lower ratio indicates the opposite.

bid-to-cover ratio

At an auction of Treasury securities, the dollar amount of money being bid compared with the dollar amount of securities being auctioned. A high ratio indicates strong demand and is likely to strengthen the market prices of other fixed-income securities.
References in periodicals archive ?
'TDF auction saw a bid to cover ratio of 1.542 with most dealers interested in securing placement at the 28-day tenor given wide expectations for rates to move lower after Thursday's projected rate cut,' said ING Bank Manila Senior Economist Nicholas Antonio T.
Bid to cover ratio increased to 1.7670 from 1.6731 last Wednesday.
The 3.8 times bid to cover ratio meant the kingdom increased the size of its issue by $2.5 billion.
'The 364-day instrument was oversubscribed by 1.30x at the last auction, while the bid to cover ratio on the 91-day and 182-day instruments were 1.01x and 1.00x respectively.'
'As you will note, the bid to cover ratio has tipped slightly, indicating there is room to do so.
The figures reflected a bid to cover ratio of 2.8, which reflects strong demand.
The bid to cover ratio for the three-month bills worth USD1bn that mature on 5 November 2012 was 4.87, up from 4.45 in the sale of three-month bills on 30 July, indicating stronger demand.
However demand was lower, with a bid to cover ratio of 1.64, almost half of the 3.05 it was in the December auction.
In the initial USD 40B auction last Thursday, a mere 0.35 times bid to cover ratio was reached.
'We have been observing that the bid to cover ratio has been declining gradually, from 5.86 on June 8 to 2.53 last week and further to 2.396 today for the 28-day TDF.
"The order book received a commendable bid to cover ratio of 2.62 times and was competitively priced at five basis points over the three month KLIBOR.
The bid to cover ratio for the three-month bills worth USD1bn that mature on 9 October 2012 was 4.40, compared with 4.32 at the auction of bills with similar maturity on 2 July, indicating higher demand, and the ratio for the six-month bills worth USD1bn that mature on 7 January 2013 was 4.35, up from 4.03 at last week's auction of six-month bills.