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Treasury 30-Year Bonds May Yield 3.233% at Sale, Survey Says

The Treasury’s $13 billion sale of 30-year bonds may draw a yield of 3.233 percent, according to the average forecast in a Bloomberg News survey of nine of the Federal Reserve’s 21 primary dealers.

The securities, which mature in February 2042, yielded 3.225 percent in pre-auction trading. Bids are due by 1 p.m. New York time. The yield at last month’s long-bond auction was 3.383 percent. The record low was 2.925 percent at December’s sale.

The March 14 offering’s bid-to-cover ratio, which gauges demand by comparing the amount bid with the amount offered, was 2.7, versus a 2.65 average at the past 10 sales.

Indirect bidders, a class of investors that includes foreign central banks, bought 29 percent of the bonds at the March sale, compared with 29.2 percent at the February auction. The average for the past 10 offerings is 30.8 percent.

Direct bidders, non-primary-dealer investors that place their bids directly with the Treasury, purchased 14.7 percent at last month’s sale, matching their takedown of the February offering. The average at the past 10 auctions is 17.1 percent.

U.S. 30-year bonds have lost 4.65 percent this year, compared with a 0.33 percent decline in the broader Treasury market, according to Bank of America Merrill Lynch indexes. Long bonds returned 36 percent in 2011, more than triple the 9.8 percent gain by Treasuries overall.

Today’s auction is the last of three Treasury note and bond offerings this week totaling $66 billion. The government sold $32 billion in three-year notes on April 10 and $21 billion in 10-year notes yesterday.

This week’s sales will raise $23.1 billion of new cash as maturing securities held by the public total $42.9 billion.

Primary dealers trade government securities with the central bank and are obliged to participate in Treasury sales.

To contact the reporter on this story: Cordell Eddings in New York at ceddings@bloomberg.net

To contact the editor responsible for this story: Robert Burgess at bburgess@bloomberg.net

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