NEW YORK, Nov 14 (Reuters) - The newest U.S. 30-year Treasury bond issue sold on Thursday will offer the highest coupon rate since 2011, according to data from the U.S. Treasury Department.
The $16 billion bond issue, which was part of this week’s $70 billion quarterly refunding, will carry a coupon rate of 3.75 percent, matching the coupon rate on a 30-year bond issue auctioned in October 2011.
The rise in the 30-year coupon rate coincided with a high yield of 3.810 percent set at the auction.
The high yield, which came in more than 1 basis point above traders expectations, stemmed from below-average bidding for the 30-year issue, depressing prices.
The issue was the third and last stemming from the refunding announcement, and Stone & McCarthy Research Associates dubbed the offer the “dog of the refunding.”
The bid-to-cover ratio, or the total bids to the amount offered, was 2.16, the lowest ratio since August and the second lowest in more than two years.
Primary dealers also bought more than recent levels at 46.5 percent of supply, suggesting they may have to resell them at lower prices and higher yields on the open market.