Auction of five-year bonds draws average demand

WASHINGTON (dpa-AFX) – A day after reporting slightly above-average demand for this month’s $69 billion two-year bond auction, the Treasury Department said Wednesday that this month’s $70 billion five-year bond auction drew average demand.

The five-year bond auction produced a high yield of 3.645 percent and a bid-to-cover ratio of 2.41.

The Treasury Department also sold $70 billion in five-year bonds last month, with a high yield of 4.121 percent and a bid-to-cover ratio of 2.40.

The bid-to-cover ratio is a measure of demand. It indicates how many bids there are for each dollar of securities sold.

The ten previous five-year bond auctions had an average bid-to-cover ratio of 2.39.

On Thursday, the Treasury Department will conclude this week’s series of announcements on the results of its long-term securities auction by announcing the results of this month’s auction of $44 billion in seven-year bonds.

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