Bond Prices Edge Higher as U.S. Plans Record Auction

Bond prices edged higher Wednesday as the federal government announced plans to sell a quarterly record of $21.75 billion in new notes and bonds next week.

The size of the quarterly refunding was within most analysts’ expectations.

The notes and bonds sold at these auctions provide a primary means used by the government for financing debt. The previous record for a refunding was $20.5 billion borrowed in May.

The $21.75 billion will be part of total borrowing needed in the current July-September quarter of $43.3 billion. It was estimated that the government would need to borrow an even larger $55 billion to $60 billion during the October-December quarter, which marks the beginning of a new fiscal year.

The auctions next week call for:

- $8.5 billion in three-year notes in minimum denominations of $5,000 to be auctioned Tuesday.

- $6.75 billion in 10-year notes in minimum denominations of $1,000 to be auctioned Wednesday.

- $6.5 billion in 30-year bonds in minimum denominations of $1,000 to be auctioned Thursday.

In the secondary market for Treasury bonds, prices of short-term governments rose 6/32 point, intermediate maturities rose 5/8 point and long-term issues were up a full point, according to Telerate, a financial information firm. The movement of a full point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

Yields on 30-year Treasury bonds were quoted at 10.65%, compared to 10.77% late Tuesday.