May Dateline Set for 20-Year Treasury Bond Auctions

The 20-year Treasury bond is coming and likely before the summer as part of the May quarterly refunding operation.

The US Treasury, in detailing its funding needs, disclosed the double-decade bond sales – including timing of such sales and auction specifics would be coming before Memorial Day.

The Treasury’s usage of the 20-year maturity is part of its broader plans to finance a record deficit this year which is projected to easily surpass $1 trillion. Given the long-term interest rates are very low the usage of longer-dated maturities makes sense.

According to the Treasury, the 20-years will follow the same issuance/re-opening schema as the 10-year notes and long bonds – one new issue followed by two reopenings in subsequent months. Twenty-year bonds will, however, be sold in the week following 10- and 30-year auctions. The bonds will have a maturity, coupon and dates that align with the 15th of the mid-quarter refunding months — which are February, May, August and November of each year.

The Treasury Borrowing Advisory Committee recommended the department launch the 20-year in May.

Treasury’s advisory committee, as well as primary dealers, recommend $10 billion to $13 billion for the new issue of the 20-year bonds, and $8 billion to $11 billion for each new issue.