# How are the T-bills allotted and how are the yields of the T-bills allotted to me determined?

T-bills are issued via a uniform-price auction. This means that all successful applications, whether non-competitive or competitive, will be allotted the T-bills at a uniform yield, which is the cut-off yield. The cut-off yield of the T-bills auction is the highest accepted yield of successful competitive applications submitted at the auction.

In a T-bills auction, allotment starts with the non-competitive applications, followed by the competitive applications:

- Non-competitive applications are allotted first, up to 40% of the total issuance amount. If the total amount of non-competitive applications exceeds 40%, the T-bills will be allotted to non-competitive applications on a pro-rated basis. However, to ensure that the final allotments are in denominations of S$1,000, adjustments will be made by the system on a randomised basis.
- The rest of the issuance amount will be awarded to competitive applications, starting from the lowest to the highest yields submitted.

Illustration

Here is a stylised example to illustrate the allotment process for T-bills, which assumes:

Total Issuance Size of T-bills S$20,000 Total Non-competitive Applications Received S$8,000 Total Competitive ApplicationsReceived S$18,000For this example, the allotment will be as follows:

- The non-competitive applications will be allotted first. As the non-competitive applications of S$8,000 is within 40% of the issuance size (i.e. S$8,000), the non-competitive applications will be fully allotted. This means that everyone who submitted a non-competitive application will be allotted the amount that they had bid for, capped at S$1 million per T-bills auction.
- The competitive applications will be allotted next based on the remaining auction amount of S$12,000. The applications will be allotted starting with the lowest yield, and move to the next lowest yield and so on until the remaining auction amount of S$12,000 is reached.

Non-competitive applications (A)

S$1,000 S$1,000 (fully allotted) S$1,000Non-competitive applications (B)

S$3,000 S$3,000 (fully allotted) S$4,000Non-competitive applications (C)

S$4,000 S$4,000 (fully allotted) S$8,000 Total of Non-competitive applications S$8,000 S$8,000 (100% of non-competitive applications allotted) S$8,000 In this example, the non-competitive applications were 100% allotted as the total amount of non-competitive applications was within 40% of the total issuance amount.Competitive applications at 1%

S$3,000 S$3,000 (fully allotted) S$11,000 All applications at this yield were fully allotted as it is below the cut-off yield.Competitive applications at 2%

S$4,000 S$4,000 (fully allotted) S$15,000 All applications at this yield were fully allotted as it is below the cut-off yield.Competitive applications at 3%

S$4,000 S$4,000 (fully allotted) S$19,000 All applications at this yield were fully allotted as it is below the cut-off yield.Competitive applications at 4%

S$5,000 S$1,000 (pro-rated allotment) S$20,000- Applications at 4% are pro-rated as the total issuance size has been reached.
- 4% becomes the cut-off yield for this auction.
- Approximately 20% of competitive applications at this cut-off yield were allotted.

Competitive applications at 5%

S$2,000 - - Applications at this yield were not allotted as the total issuance size has been met. Total of Competitive applications S$18,000 S$12,000 S$20,000 4% becomes the cut-off yield for this auction. In summary Total of both Non-competitive and Competitive applications S$26,000 (Non-competitive S$8,000, Competitive S$18,000) S$20,000 (Non-competitive S$8,000, Competitive S$12,000) S$20,000 Cut-off yield = 4%.In this example, the cut-off yield is 4%. All allotted applications, non-competitive and competitive, will receive the same cut-off yield of 4%.