The federal government sold $12 billion worth of 10-year notes Wednesday in the second leg of its quarterly auction, and the sale went about as expected.
The average yield on the notes was 7.54%; the Treasury received bids totaling $28.02 billion and accepted $12.04 billion, including $692 million in non-competitive offers at the average yield, up from $623 million received at the previous auction Nov. 9.
The average dollar price was 99.723; the coupon rate was set at 7.5%.
In all, the results indicated an orderly, fairly tight auction that was neutral for the bond market, analysts said.
Weak demand for the 10-year notes could have triggered a selloff in advance of the final leg of the government's quarterly refunding today, they said.
Tuesday's sale of $17 billion in three-year notes went well, investors and analysts said. The refinancing is to end today with the sale of $11 billion worth of 30-year bonds.
"It couldn't have come out more close to expectations," said Dana Johnson at First National Bank of Chicago.