2012 Economic Calendar
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30-Yr Bond Auction
Released On 4/12/2012 1:00:00 PM For 4/12/2012 1:00:00 PM
Auction Results
Bid/Cover2.76 
Coupon Rate3.125% 
Total Amount$13 B 
Yield Awarded3.230% 

Highlights
Another heavy week of Treasury supply comes to an end with a moderately well received 30-year bond auction. The auction, a reopening of the March 3.125 percent coupon, drew strong coverage of 2.76 while the high yield came in as expected at 3.230 percent. But participation by long-term investors looks thin judging by the oversized 56 percent share of the $13 billion offering that were awarded to dealers.

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 securities dealers, known as primary dealers, are authorized and obligated to submit competitive tenders at Treasury auctions. Dealers can hold the bills, resell the bills to their clients or trade them with other securities firms. Typically, the New York Fed approves about 20 securities firms to be primary dealers but that number dropped sharply during the recent financial crisis as some were merged into other firms or went bankrupt. The Fed has been rebuilding that number regularly and the latest list can be found here. 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 expanded 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
 
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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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