Fed Receives $55.8B Bids

The Fed got $55.8B in bids from 83 bidders for its $75B, 28-day Term Auction Facility (bid/cover ratio of 74%). Demand has grown over the past two auctions.

Under the Term Auction Facility (TAF), the Federal Reserve will auction term funds to depository institutions. All depository institutions that are eligible to borrow under the primary credit program will be eligible to participate in TAF auctions. All advances must be fully collateralized. Each TAF auction will be for a fixed amount, with the rate determined by the auction process (subject to a minimum bid rate). Bids will be submitted by phone through local Reserve Banks.

On September 21, 2009, the Federal Reserve conducted an auction of $75 billion in 28-day credit through its Term Auction Facility. Following are the results of the auction:

Stop-out rate: 0.250 percent
       
Total propositions submitted: $55.763 billion
Total propositions accepted: $55.763 billion
Bid/cover ratio: 0.74
       
Number of bidders: 83

The awarded loans will settle on September 24, 2009, and will mature on October 22, 2009. The stop-out rate shown above will apply to all awarded loans.

Institutions that submitted winning bids will be contacted by their respective Reserve Banks by 11:30 a.m. EDT on September 22, 2009. Participants have until 12:30 p.m. EDT on September 22, 2009, to inform their local Reserve Bank of any error.