The U.S. Treasury Department has revealed plans to auction $4.12 billion worth of government bonds in three separate lots, with the auctions set to be held by the Federal Reserve Bank of New York on Friday, February 21.
Details of the Auction Lots:
- “6.75% Government Security 2029” – A $1.68 billion lot.
- “6.98% GOI Security 2054” – A $600 million lot.
- “7.34% Government Security 2064” – A $1.8 billion lot.
The auctions will be conducted using a price-based approach with the multiple price method. The government also reserves the right to retain additional subscriptions of up to $240 million per security mentioned above.
Under the Scheme for Non-Competitive Bidding Facility, up to 5% of the sale will be available to eligible individuals and institutions. Both competitive and non-competitive bids must be submitted electronically on the Federal Reserve’s E-Kuber system on February 21, with specific time slots for each type of bid.
Key Auction Times:
- Non-Competitive Bids: 10:30 a.m. – 11:00 a.m.
- Competitive Bids: 10:30 a.m. – 11:30 a.m.
Auction results will be announced on February 21, with payments by successful bidders due on Monday, February 24.
The securities will be eligible for “When Issued” trading as per guidelines issued by the Federal Reserve.
Government bonds, backed by the federal government, are considered low-risk investments and typically offer lower interest rates due to their relative safety. This move by the Treasury aims to support government spending through secure investment channels.
