US $13 bln of 30-yr bonds draw robust demand

NEW YORK, March 11 (Reuters) - The U.S. government attracted robust demand at its offering of $13 billion worth of 30-year bonds on Thursday, ending a series of well-bid auctions on a resoundingly strong note.

The long-bond sale, a reopening of previously issued debt, was the last of this week's three bond offerings totaling $74 billion and should tamp down for now any worries over the government's ability to attract investors in numbers.

The auction drew bids worth 2.89 times the amount on offer, outperforming the average of 2.58 at the last six reopenings of 30-year bonds.

Long bonds are a tricky maturity to sell and reopenings often suffer lackluster interest, but a recent sell-off in Treasuries brought prices down to attractive levels, as was the case in the week's two previous offerings.

"Another day and another incredibly strong auction," said Aaron Kohli, interest rate strategist at RBS Securities in Stamford, Connecticut.

Illustrating this point, yields at the auction came in below expectations, based on trade in the when-issued market at the deadline for bids, indicating investors were willing to pay a premium over market prices.

In one apparent weak note, foreign central bank and large institutional investor demand, gauged by the indirect bidder category, appeared weak, accounting for about 24 percent of the sale.

This was well below the average of about 43 percent in the reopenings since June, which has become a benchmark for comparisons due to changes in calculations that had boosted this category.

Much of that demand, though, was replaced by or migrated to the direct bid category, which accounted for a record 30 percent of the sale. That was also well above the roughly five-percent average for reopenings since June.

"Directs were at record allocation and was the first time in the history of the 30-year that direct awards exceeded indirect awards," said Kohli.

Financial markets are watching bond auctions closely, given a burgeoning U.S. budget deficit brought on by a costly financial sector bailout and efforts to stimulate the economy.

While investors in May 2009 briefly appeared to question the longevity of the United States' prized AAA credit rating, those worries seem to have subsided. Some analysts say the jump in debt could yet come back to haunt the government.

(Reporting by Burton Frierson; Editing by Kenneth Barry)