A competitive bid is one where you have to specify the price (to be expressed in terms of
percentage yield) that you are willing to pay for the SGS bond/T-bill. You may or may not be
allotted the securities after the auction, depending on your submitted yield relative to the
yields submitted by all the other competitive bidders. In the context of SGS Bonds and T-bill
auctions, a lower yield represents a more competitive bid as the bidder is indicating that
he/she will accept a lower interest rate.
A non-competitive bid is one where you do not specify a price (to be expressed in terms of
percentage yield) but you are willing to be allotted the SGS Bonds/T-bills at a uniform yield
based on the results of the competitive tenders.
All non-competitive bids will be satisfied first, and the balance of the amount to be issued is
then awarded to those who have submitted competitive bids. In all SGS Bonds/T-bills
auctions, 40% of the total issuance amount is reserved for non-competitive bids. If the
amount of non-competitive bids exceeds the 40%, the SGS Bonds/T-bills will be allocated to
non-competitive bidders on a pro-rated basis.
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