Treasury Bills

Treasury bills are a type of instrument issued by the Spanish Treasury with a maturity of less than 18 months. They were created in 1987 when the country's Book-Entry Government Debt Market went into operation. They are issued each month using an auction-based procedure. The minimum bid amount is 1,000 euros. Purchases for higher amounts must always be in multiples of 1,000 euros.

Treasury bills are securities issued at a discount. Issued at a discount means that these assets give their buyer the right to be paid a prearranged amount on an established date, and they are being sold now for a lower amount. The interest generated by Treasury Bills is obtained by calculating the difference between the purchase price and the amount to be paid back upon maturity.

Spain's Treasury issues Treasury Bills (Letras del Tesoro) with the following terms:

• Treasury bills at 3 months.
• Treasury bills at 6 months.
• Treasury bills at 9 months.
• Treasury bills at 12 months.

Treasury bills are short-term securities, which means that their value varies moderately during their term. This gives them lower risk for investors who many need to sell them prior to their maturity date.