Treasury 30-Year Bond Sale May Yield 3.463% -- Survey

The Treasury’s $13 billion sale of 30-year bonds may draw a yield of 3.463 percent, according to the average forecast in a Bloomberg News survey of seven of the Federal Reserve’s 22 primary dealers.

The securities, which mature in May 2044, yielded 3.47 percent in pre-auction trading. Bids are due by 1 p.m. New York time. The yield at the last offering of long bonds, on May 8, was 3.44 percent, the lowest level since last June’s auction of the debt.

The May sale’s bid-to-cover ratio, which gauges demand by comparing the amount bid with the amount offered, was 2.09, the lowest since August 2011 and compared with 2.52 at the previous offering and an average of 2.35 at the past 10 auctions.

Indirect bidders, a class of investors that includes foreign central banks, bought 40.4 percent of the bonds at last month’s auction. The average at the past 10 offerings was 41.3 percent.

Direct bidders, non-primary-dealer investors that place their bids directly with the Treasury, purchased 8.4 percent of the securities at last month’s sale, the fewest since March 2013. The average at the past 10 auctions was 16.1 percent.

Thirty-year bonds have returned 11 percent this year, compared with a 2.5 percent gain by the broader U.S. Treasuries market, according to Bank of America Merrill Lynch indexes. Long bonds lost 15 percent in 2013, versus a 3.4 percent decline by Treasuries overall.

Today’s auction is the final of three note and bond offerings this week. The U.S. sold $28 billion of three-year debt on June 10 at a yield of 0.93 percent and auctioned $21 billion of 10-year debt yesterday at a yield of 2.648 percent.

The sales will raise $30 billion of new cash, as maturing securities held by the public total $32 billion, according to the U.S. Treasury.

Primary dealers trade government securities with the central bank and are obligated to bid in Treasury auctions.

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