2009 Economic Calendar
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30-Yr Bond Auction
Released on 8/13/2009 1:00:00 PM For 8/13/2009 1:00:00 PM
Auction Results
Bid/Cover2.54 
Coupon Rate4.500% 
Total Amount$30 B 
Yield Awarded4.541% 

Highlights
Demand was strong for the 30-year bond auction, winding up an overall solid reception to the Treasury's record size $75 billion quarterly refunding. Today's $15 billion bond auction, despite its large size, posted a strong bid-to-cover ratio of 2.54. The high yield of 4.541 percent was several basis points better than early expectations. Demand from buyside accounts was especially strong. Still, questions over the massive size of the nation's fiscal deficit will continue to raise questions over the sustainability of Treasury demand.

Definition
Treasury notes are sold at regularly scheduled public auctions. The competitive bids at these auctions determine the interest rate paid on each Treasury note issue. A group of 17 securities dealers (as of June 18, 2009), known as primary dealers, are authorized and obligated to submit competitive tenders at Treasury auctions. Dealers can hold, resell, or trade the securities with other firms. The Treasury announces the amount, date and time of the 30-year note auction. Through 2008, the 30-year bond auctions had been quarterly. In 2009, the Treasury added more auctions that recur almost monthly to help fund the expanding federal deficit. The 30-year bonds are announced around the first week of the month and then auctioned the following week. Generally, the 30-year bonds are issued (settled) on the 15th of the month, unless it falls on a weekend or holiday, and then they are issued on the next business day. The issuance of new 30-year bonds went on hiatus in 2001 but the Treasury reinstituted them in 2006. (Department of the Treasury)  Why Investors Care
 
[Chart]
Data Source: Haver Analytics
 
[Chart] This chart reflects the monthly average yields for 30-year bonds in the secondary market. These could be at slight odds with the auction averages in the primary market.
Data Source: Haver Analytics
 

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