The Bank of Canada says it will sell another $550 million of its holdings of treasury bills.

The sale will partially offset the temporary increase in assets associated with the term purchase and resale transactions announced Monday. The central bank said it will enter into a $4 billion 91-day PRA transaction on October 21. The paper matures Jan. 22, 2009.

The list of eligible securities for these transactions is the same as the list of securities permanently eligible as collateral for the bank’s Standing Liquidity Facility, and will be subject to the same margin requirements as those applicable in SLF transactions.

Bank-sponsored asset-backed commercial paper that has met the Bank of Canada’s criteria will also be an eligible security for affiliated dealers on a temporary basis, it noted.