August 14, 2014 / 5:55 PM / in 3 years

U.S. sells 30-year bond at lowest yield in 15 months

NEW YORK, Aug 14 (Reuters) - The U.S. Treasury Department on Thursday sold $16 billion of 30-year bonds at a yield of 3.224 percent, which was the lowest since May 2013 on robust demand from investors and foreign central banks, Treasury data showed.

The Treasury awarded direct bidders, which include smaller bond dealers and selected large financial companies, 24.36 percent of the supply, more than double the 11.09 percent set in July. It was this group’s largest share purchase since October 2011.

Large fund managers, overseas central banks and other indirect bidders accounted for 45.86 percent of the purchases of the latest 30-year issue, which was the final leg of this week’s $67 billion of the federal government quarterly refunding.

It was this group’s smallest share purchase at a 30-year auction since May, Treasury data showed.

Primary dealers or the 22 top U.S. Wall Street firms that deal directly with the Federal Reserve bought 29.79 percent of the 30-year offering.

This was their second smallest share since this maturity was reintroduced in February 2006.

The ratio of the amount of bids to the size of the 30-year bond offering was 2.60, up from 2.40 the previous month.

The bid-to-cover ratio, which is a gauge of overall demand at a bond auction, has averaged about 2.50 since the 30-year bond returned. (Reporting by Richard Leong; Editing by Chizu Nomiyama)

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