2012 Economic Calendar
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5-Yr TIPS Announcement
 
Description of Offering
Offering Amount$16.0 B 
CUSIP Number912828SQ4 
Auction DateApril 19, 2012 
Issue (Settlement) DateApril 30, 2012 
Maturity DateApril 15, 2017 
Min Bid Amount$100 

Receipt of Tenders
Noncompetitive Bids12:00 Noon ET
Competitive Bids1:00 p.m. ET

Definition
The Treasury sells inflation-indexed securities, also known as TIPS, at regularly scheduled auctions. Competitive bids at these single-price auctions determine the interest rate paid on each issue, which remains fixed. A group of securities dealers, known as primary dealers, are authorized and obligated to submit competitive tenders at Treasury auctions. Dealers can hold the bills, resell the bills to their clients or trade them with other securities firms. Typically, the New York Fed approves about 20 securities firms to be primary dealers but that number dropped sharply during the recent financial crisis as some were merged into other firms or went bankrupt. The Fed has been rebuilding that number regularly and the latest list can be found here. The Treasury announces the amount, date and time of the 5-year TIPS auction twice a year -- in April and October. The 5-year TIPS are usually announced during the third week of April and auctioned the subsequent week. In October, TIPS are also announced during the third week of the month, but this is typically a reopening of a previously issued security. The 5-year TIPS are issued on the last business day of the month. These securities mature at mid-month; consequently, investors who purchase these securities at auction are required to pay the interest accrued between the 15th of the month and the issue date.  Why Investors Care
 

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