Money Markets

Discretionary Bilateral Treasury Bill Issuance

The DMO may issue Treasury bills bilaterally, on request from any of its eligible cash management counterparties. Bills issued in this way will, however, only be created in circumstances where the DMO is satisfied that such issuance is consistent with its own cash management operational requirements, and prices quoted by DMO dealers will be determined by prevailing market rates for the relevant maturity and the DMO’s own cash position at the time.

The DMO may consider requests from counterparties for the creation of new or existing bills, with a minimum time to maturity of one-day. Only bills with a maturity which differs by at least five working days from the bills issued to the market at the regular tenders either preceding or succeeding any bilateral trade will be eligible to be issued in this way. The minimum size of any such request is £500,000 nominal. There is no explicit limit on the maximum size of any bilateral transaction, or on the size of any Treasury bills, whose size is increased as a result of the operation of this facility, although the DMO retains the right to refuse or limit the maximum size of any such request, according to its own cash position and/or internal risk limits at the time. Where there are matching maturity dates, bills issued in this way will add to, carry the same ISIN code and be fungible with, any existing stock of bills of that maturity date, whether previously issued via regular or ad hoc tender, bilaterally and/or created for the Bank of England’s Funding for Lending Scheme.

Treasury bills to be issued on the same day as a request is made must be transacted and notified to the DMO settlements team before 10:30am on the request date. Treasury bills to be issued on a subsequent business day to the day a request is made may be transacted and notified to the DMO settlements team after 10:30am on the request date. All bilateral bills transacted will be included in the month-end totals of Treasury bill amounts in issue reported on the DMO website.