In its refunding announcement on April 30, 2008 the Treasury announced that it will begin issuing 52-week bills every four weeks. Treasury notes are sold at regularly scheduled public auctions. Competitive bids at these auctions determine the interest rate paid on each Treasury note issue. Twenty primary dealers (as of November 30, 2007) are authorized and obligated to submit competitive tenders at Treasury auctions. Dealers can hold, resell, or trade the securities with other firms. The Treasury usually announces the size, date and time of the monthly two-year note auction on the third or fourth Monday of each month. The auction takes place the following Wednesday and the securities are issued (settled) on the last day of the month. If the last day is a weekend or a holiday, the securities are issued on the first business day of the following month. Why Investors Care
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Highlights
The debut of the 52-week bill, the first such auction in seven years, went very well. Bid-to-cover for the $16 billion offering was a very strong 3.30. The stop-out rate of 2.105 percent was right on the when-issued bid at 1:00 p.m. ET. The take down by indirect bidders was light at 10 percent.
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