In what sequence are a firms bids considered?
The issue with the highest overall weighted-average bid rate is auctioned first, and remaining issues are auctioned in order of their weighted-average bid rates, listed in descending order. A firm’s borrowing capacity is reduced by the par amount of each loan award before bids on issues with lower weighted-average bid rates are considered. When a dealer reaches its total borrowing capacity, subsequent bids are eliminated from selection.
