Pender, Wilson & Company

This case involves a Treasury bill auction and the bidding for bills by a recognized, primary security dealer. The procedures involved in a Treasury action are described as are possible bidding strategies. Factors influencing a bid, including supply, Fed actions, dealer financing costs, competing money market instruments, coverage ratios, percent of non-competitive bids, and recent interest-rate trends and market conditions, are detailed. While the case involves a decision, it is better used as institutional backdrop for discussing various issues involved in a Treasury auction.