NEW YORK, July 25 Uncle Sam shouldn't rush to
sell bonds longer than 30 years because there is adequate supply
to meet demand for long-dated U.S. government bonds right now,
according to analysts at the broker-dealer unit of Nomura
Last week, the U.S. Treasury Department released its
quarterly survey to Nomura Securities and the other 21 U.S.
primary dealers, the top Wall Street firms that do business
directly with the Federal Reserve.
A question in the latest Treasury survey was whether it
should "consider issuing a security with a maturity greater than
The 30-year bond is the longest maturity the
U.S. Treasury issues. In April, Canada debuted a 50-year bond.
Britain and France have sold 50-year securities, as well.
Some analysts said the U.S. government should sell bonds
with maturities greater than 30 years to lock in historic low
borrowing costs with expectations the Fed might begin raising
short-term interest rates a year from now.
The huge amount of cash stemming from the ultra loose
policies of the Fed and other major central banks since the
global credit crisis has stoked intense demand for 30-year
Treasuries from pension funds, insurers and other investors who
seek safe investment with a steady yield.
"Just because 30s are (well-) bid doesn't mean that there is
an immediate need for (greater than) 30-year bond issuance,"
Nomura Securities analysts wrote in reply to that Treasury
question, released on Friday.
They estimated the Treasury might end up selling $40 billion
to $50 billion in these ultra long-dated securities annually and
risk "cannibalizing demand for the current 30-year bond, which
meets most today's U.S. long duration needs," they said.
(Reporting by Richard Leong; Editing by Nick Zieminski)