U.S. Treasury 30-Year Bonds Yield 2.335% at Auction

(Bloomberg) -- The U.S. Treasury Department sold $19 billion of 30-year bonds at a yield of 2.335%, the lowest since the Aug. 2016 auction.

The bid/cover ratio, which gauges demand by comparing the number of bids to the amount of securities sold, was higher at 2.24, indicating stronger demand. At the Treasury’s last sale of the bonds, the ratio was 2.13.

The yield on the bonds sold today was the lowest since 2.274% at the Aug. 11, 2016 auction, the Treasury said. At the previous auction, the bonds yielded 2.644%.

Indirect bidders, a group that includes foreign central banks, bought 61.3% of the amount sold, compared with 50% in the prior auction. Primary dealers bought 26.1%, compared with 33.2% in the previous sale. Direct bidders purchased 12.5%.

Auction Details

At today’s auction, 46.2% of the bids that were filled came in at the high yield of 2.335%. The low yield submitted was 1.888%, the median yield was 2.265%, and the coupon rate was 2.25%. The price was 98.173884.

Tenders totaled $42,521,892,200 and the Treasury accepted $19,000,026,200 of the bids. Competitive bids awarded totaled $18,991,314,000. Non-competitive bids awarded -- including those sold directly to individual investors -- totaled $8,712,200.

For its own accounts, the Federal Reserve was awarded $12,398,496,800.

The bonds will be issued or settle Aug. 15 and mature Aug. 15, 2049. The CUSIP number will be 912810SJ8.

The minimum amount for Strips was $100.

The Treasury sells all its bills, notes and bonds on a single-price basis. Bonds are awarded at the highest yield needed to sell the securities.

Strips stands for Separate Trading of Registered Interest and Principal of Securities. Coupons are separated from a note or bond and become a security. The remaining face value bond becomes another security that is known as a zero-coupon note or bond.

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