U.S. Finishes Big Refunding; 30-Year Treasury Yields Fall

Yields on 30-year Treasury bonds fell in Thursday’s auction to the lowest level in nine months as the government concluded its biggest-ever, $34.25-billion quarterly refunding.

The average yield was 8.71%, down from 8.87% at the last auction on Aug. 9.

It was the lowest rate since 30-year bonds averaged 8.50% on Feb. 8. The bonds will carry a coupon interest rate of 8.75% with each $10,000 in face value selling for $10,037.60.

A total of $10.75 billion in bonds was sold out of bids totaling $22.08 billion.

The Treasury on Thursday also sold $12 billion in 161-day cash management bills with an average discount rate of 7.08%.

The discount rate understates the actual return to investors: 7.41% with a $10,000 bill selling for $9,683.40.

On Wednesday, yields on 10-year Treasury notes fell to their lowest level in a year.

The average yield was 8.52%, down from 8.77% at the last auction on Aug. 8.

It was the lowest rate since 10-year notes averaged 7.94% on Nov. 13, 1989. The notes will carry a coupon interest rate of 8.50%, with each $10,000 in face value selling for $9,986.70.