10-Year Note Rate Climbs to 8.8%--Its Highest in Year
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WASHINGTON — Yields on 10-year Treasury notes rose in Wednesday’s auction to the highest level in a year as the government’s record $30.5-billion refunding cleared its second hurdle.
The average yield was 8.88%, up from 8.59% at the Feb. 7 auction.
It was the highest rate since 10-year notes averaged 9.18% on May 10, 1989. The notes will carry a coupon interest rate of 8.875%, with each $10,000 in face value selling for $9,996.70.
A total of $10 billion in notes was sold out of bids totaling $30 billion.
The refunding winds up today with the auction of $10 billion in 30-year bonds.
It began Tuesday with the sale of $10.57 billion in three-year notes, with an average yield of 8.74%, up from 8.43% at the last three-year auction Feb. 6 and the highest since such notes averaged 9.12% last May 9. Bids totaled $37.3 billion.
This quarter’s refunding is $500 million larger than the last two.
The auction also went well despite slightly disappointing Japanese participation. The Japanese bought 20% to 25% of the issue, slightly below the 30% expected.
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