What’s old is new again in Treasury debt.
The U.S. Treasury, faced with financing budget deficits topping $1 trillion annually, is re-introducing a 20-year bond.
The new issue security was selected after Treasury looked at issuing super-long bonds – with 50 year and 100 year maturities. According to a Treasury statement, the new 20-year bond would be made available to investors in the first half of 2020. More details are expected at the Treasury’s quarterly refunding news conference on Feb. 5.
Treasury discontinued the 20-year constant maturity series at the end of calendar year 1986 and reinstated that series on October 1, 1993.
“We seek to finance the government at the least possible cost to taxpayers over time and we will continue to evaluate other potential products to meet that need,” Treasury Secretary Steven Mnuchin said in a statement.
The statement said that Treasury had gathered feedback on potential new bonds from a large number of market participants. Based on that information it felt that there will be strong demand from investors for a 20-year bond.
The government currently sells 10-year notes and 30-year Treasury bonds.