However, there is one exception to this procedure. If the stop-out rate of a T-note or Tbond

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However, there is one exception to this procedure. If the stop-out rate of a T-note or Tbond auction is below 0.125 percent, the annual coupon rate is set at 0.125 percent and the price that all successful bidders pay will be above par. This rule was enacted in April 2011;

before then, the coupon rate would be set at zero. LO.1

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Financial Markets And Institutions

ISBN: 9781259919718

7th Edition

Authors: Anthony Saunders, Marcia Cornett

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