Frequency of Treasury Issues to Rise

WASHINGTON — The Treasury Department said Wednesday that it will increase the frequency of its 10-year note and 30-year bond auctions without altering the overall amount of long-term debt it sells to investors each year.

“Total annual issuance in future years will not change significantly” as the Treasury sells 10-year notes six times a year instead of the current four times, and sells 30-year bonds three times instead of two, said Darcy Bradbury, assistant Treasury secretary for financial markets.

“We did not want to increase radically or alter the proportion of 30-year bonds in our overall mix,” Bradbury said at a news conference.

Treasury bonds traded on Wall Street gave up early gains as news of the department’s action reached the market. They recovered much of that loss after traders realized the increased frequency didn’t imply a larger supply of bonds, which would tend to dilute the value of new and existing issues. The benchmark 30-year T-bond yield was unchanged at 6.90%.

The cumulative borrowing demands of the Treasury on global credit markets also won’t be altered by any difference in the average maturity of the government’s total outstanding debt. Debt subject to limit, the total federal debt now outstanding, totaled $5.009 trillion at the close of business Monday. That compares with the legal ceiling on Treasury debt of $5.5 trillion.

“These changes in the Treasury borrowing schedule will mean that Treasury borrowing will more closely match the Treasury’s need for funds, without any significant impact on the maturity mix of Treasury borrowing,” Bradbury said. “The decisions I’ve announced today do not alter the maturity mix.”

The change to smaller, more frequent auctions is intended to spread out the Treasury’s borrowing demands on credit markets, to meet month-to-month Treasury cash needs more smoothly, and to increase opportunities for reopening old issues and stripping new issues, Bradbury said.