OLOs are :
- medium-, long- or very long-term securities;
- denominated in EUR;
- issued in different ways :
- by auction based on the prices;
- by syndication (e.g.: when issuing the first tranche of a new line).
- dematerialized securities held in a securities account system to which CLEARSTREAM and EUROCLEAR have access;
- issued in tranches forming a line;
- securities having an identical nominal interest rate and redemption date within a line;
- fungible within each line (i.e. giving subscribers and issuer the same rights and obligations);
- fixed or floating rate securities;
- strippable securities (only for fixed rate OLOs);
- announced in an indicative calendar published in December and containing certain OLO auction details for the following year.
- in the OLO auctions, the BDA sells existing OLOs to the Primary Dealers;
- each Primary Dealer can bid at several prices in the quantities they wish, reflecting the demand they feel in the market;
- the amount per bid should be a multiple of EUR 1 million with a minimum of EUR 10 million;
- at the end of the auction, the BDA sets a minimum price;
- all bids submitted at prices higher than this minimum price are allotted for their full amount;
- allocations in response to bids submitted at the minimum price chosen by the BDA may be proportionally scaled down, in which case the amounts thus reduced are rounded up to the next tranche of EUR 1 million with a minimum of EUR 10 million per bid;
- The BDA may occasionally also organize Optional Reverse Inquiries (ORIs) following a pre-announced calendar. ORIs are auctions specifically aimed at helping primary dealers buy bonds that are hard to find in the market, thus improving the OLO market liquidity. No rights to non-competitive subscriptions are granted on ORI auctions;
- More details can be found in the procedure manual published on this website.
WHO SHOULD INVEST IN OLOS ?
Being standardised securities, OLOs are well suited for the professional investor looking for a liquid and safe investment. Private investors may also have an interest in buying OLOs and they can do so through their financial institution.
WHAT IS THE ROLE OF THE PRIMARY DEALERS ?
The placement of OLOs and their liquidity on the secondary market is ensured by the Primary Dealers.
Only Primary Dealers are entitled to participate in auctions and syndications.