The new 30-year Dutch Government bond was auctioned via a Dutch Direct Auction (DDA).
For the first time, the auction was conducted over the internet using a system built for the Dutch State Treasury Agency (DSTA) by i-Deal, a financial services technology company that provides bookbuilding software to participants in the debt and equity new-issues market.
The result of the auction was overwhelming. End investors started submitting their bids via Primary Dealers using the i-Deal system at 10:00 CET. The opening of the order book was very successful in size as well as in number of orders. As a result of a highly successful auction right from the outset, the book was closed early at 12:00 CET. By then the book had reached a total volume of about 17 billion euros and roughly 250 orders had been input. The thirteen Europe-wide Primary Dealers submitted their investor's orders over the internet via the i-Deal system and the DSTA managed demand and allocations using the i-Deal bookbuilding technology.
"The participants in this auction have benefited from instantaneous submission of orders and two-way communication across the internet rather than the traditional, more arduous message processing and exchanging of orders." Paul Lucas, i-Deal Managing Director, said.
"In time critical and pressurized deals like the DDA it's vital that systems can process and gather orders instantly and securely. We're glad that the DSTA has had the opportunity to experience i-Deal's unprecedented capabilities as a real-time global order gathering system. We hope that many more national debt management offices will partake of the system's benefits in the future," said Lucas.
Ron Bruggink, Head of Money and Capital Markets at the DSTA, said that "The Dutch State is very satisfied by the overwhelming demand for the new 30 year bond. It goes without saying that auctioning a bond in high demand can be a stressful event. Receiving 250 orders and a volume of 17 Billion Euros is one thing, processing them while staying in touch with the market is another. Because of the new bookbuild system we were able to focus on what an auction is: selling bonds to the market at a fair price."