Noncompetitive bid

(redirected from Noncompetitive Tenders)

Noncompetitive bid

In a Treasury auction, bidding for a specific amount of securities at the price, whatever it may turn out to be, equal to the average price of the accepted competitive bids.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Noncompetitive Bid

One of two bidding processes for buying Treasury securities and some other debt securities, in which the investor agrees to purchase a certain number of securities at the average price of all competitive bids over a given time. The noncompetitive bid process allows smaller investors to buy Treasury securities in a market that would otherwise be dominated by wealthy institutional investors. The minimum price in a noncompetitive bid is $10,000.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

noncompetitive bid

A method of purchasing U.S. Treasury bills at the weekly public auction without having to submit a price. With a noncompetitive bid, the investor agrees to purchase a given amount of securities (a minimum of $10,000 and a maximum of $500,000) at the average price set at the auction. Noncompetitive bids permit small investors to participate in the auction.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Noncompetitive bid.

Investors who can't or don't wish to meet the minimum purchase requirements for competitive bidding on Treasury bills or notes may enter a noncompetitive bid.

You can invest as little as $1,000 or as much as $5 million in each new issue through Treasury Direct. Treasury Direct is a system that allows you to buy government securities without going through a bank or a brokerage firm.

The Treasury sells T-bills, for example, to all noncompetitive buyers whose bids arrive by the weekly deadline, for a price equal to what competitive bidders pay for that week's issue.

A noncompetitive bid may also be known as a noncompetitive tender.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
On the demand side, growth in M2 appears to have been held down early in the year by the public's concerns about depository institutions; purchases of Treasury securities through noncompetitive tenders were especially heavy in January.
Evidence of the rising opportunity cost of holding M2 can be seen in the unusually heavy volume of noncompetitive tenders in Treasury bill and note auctions, which suggest a shift out of M2 balances.
Households responded to the relatively low returns on deposits by looking elsewhere, as suggested by heavy flows into stock and bond mutual funds and sizable noncompetitive tenders at Treasury auctions.
Noncompetitive tenders for Treasury bills and notes, a rough indicator of the extent to which individual investors are increasing their holdings of Treasury securities, surged early in the year and remained strong through March.
Rates on Treasury bills moved up appreciably less, at a time when there was no overall growth in the size of the weekly auctions and the supply available for competitive awards was reduced by substantial retail demand through noncompetitive tenders. In longer-term debt markets, yields generally were up about 1/3 to 1/2 percentage point, but yields on fixed-rate mortgages rose somewhat more.