OATs are fungible medium- and long-term Treasury bonds with maturities of 2 to 50 years. For the sake of simplicity, as of 1 January 2013, new benchmark medium-term securities (those with two-year and five- year maturities), formerly issued as BTANs (fixed-rate Treasury bills with annual interest), have been issued as OATs, as have long-term securities.
OATs are now the only form of medium- and long-term State financing. They were formerly used solely for long-term financing between 1985 and 2012. OATs are fungible securities with maturities at issue of 2 to 50 years, usually issued by auction. New issues are generally associated with existing issues. This enables the State to issue new bonds at a price in line with the latest market prices but identical in all other respects to the initial issue. As a result, the State avoids issuing too many bonds with different characteristics and ensures the liquidity of those already issued.
OATs have a par value of €1. The value of the accrued coupon is calculated on the basis of the exact number of days over the exact number of days (ACT/ACT). The maturity dates and coupon dates of OATs are the 1st, 24th or 25th of the month. OAT trades are settled by national and international central securities depositories.
On the Friday preceding an auction, AFT announces the bonds to be auctioned on the following Thursday and the upper and lower limits of the total amount to be auctioned. Auctions of long- term OATs (maturities of eight and a half years or more in 2022) are held on the first Thursday of the month at 10:50am, while auctions of medium-term OATs (maturities of two to eight and a half years in 2022) are held on the third Thursday of the month at 10:50am. Bids of at least €1m are expressed on the basis of price as a percentage of par value net of accrued interest to two decimal places. Since 6 October 2014, OAT auctions have been settled at T+2,
i.e. usually the Monday after the auction.