Bond Auction

A bond auction is the process of selling short and long-term bonds to institutional and individual investors trying to lower the cost of financing national debt.

It starts from the announcement by the central bank telling the amount of money it intends to borrow, and the central bank will announce the term length of bonds and date of the auction as well.

Then interested investors like broker-dealers, institutions, and individual investors submit the amount of bonds that they are willing to pay.