The Reserve Bank (RBI) will sell dated government securities worth Rs. 15,000 crore in four tranches on Friday, RBI said.
Dated government securities are long term securities carrying a fixed or floating coupon or interest rate paid on the face value. It is payable at fixed time periods, usually half-yearly. The tenor of dated securities can be up to 30 years.
In a price based auction to be held on June 20, RBI will sell 8.35 per cent government stock 2022 for Rs.3,000 crore, 8.60 per cent government stock 2028 for Rs.7,000 crore, 9.20 per cent government stock 2030 for Rs.3,000 crore and 9.23 per cent government stock 2043 for Rs.2,000 crore.
“Up to 5 per cent of the notified amount of the sale of the stocks will be allotted to eligible individuals and institutions as per the scheme for non-ompetitive bidding facility in the auction of government securities,” RBI said.
RBI said both the competitive and non-competitive bids for the auction should be submitted in electronic format on the RBI’s Core Banking Solution (E-Kuber) system on June 20, 2014.
The non-competitive bids should be submitted between 10.30 a.m. and 11.30 a.m. and the competitive bids should be submitted between 10.30 a.m. and 12 noon, it said.
The result of the auctions will be announced on the same day and payment by successful bidders will be on June 23, 2014, it added further.
The stocks will be eligible for “When Issued” trading for a period commencing from June 17-20, 2014 in accordance with the guidelines on “When Issued transactions in Central Government Securities” issued by RBI, it added.
Securities trade on a when issued basis when they have been announced, but not yet issued. The transaction is settled only after the security has been issued.