Government bonds are placed not at a fixed price, but through an auction. The Ministry of Finance announces the issue parameters — volume, maturity, date — after which participants submit bids specifying the amount and acceptable yield for them.
Bids can be competitive or non-competitive. In a competitive bid, the participant sets their own price or yield and risks not receiving the securities if they ask for too much. In a non-competitive bid, they accept the auction's volume-weighted average result and are more likely to have their bid filled.
Auction results are an important indicator for the entire debt market: the resulting yield on government securities serves as a risk-free benchmark against which the risk premium for corporate bonds is assessed. Direct access to the auction is available to banks and professional participants; private investors purchase government bonds through a broker, usually already on the secondary market.