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Resource Center » U.S. & International Recaps | Release Dates | Why Investors Care | Today's Calendar
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5-Year Note Auction
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Definition
Treasury notes are sold at regularly scheduled public auctions. The competitive bids at these auctions determine the interest rate paid on each Treasury note issue. Twenty-two primary dealers (as of August 2004) are authorized and obligated to submit competitive tenders at Treasury auctions. Dealers can hold, resell, or trade the securities with other firms. The Treasury announces the amount, date and time of the 5-year note auction monthly. Eight times a year, the 5-year notes are announced around the second week of the month (usually on Monday) and then auctioned two days later. In February, May, August and November, they are announced on the first Wednesday of the month and auctioned during the second week of the month (usually on Wednesday). In all cases, the 5-year notes are issued (settled) on the 15th of the month, unless it falls on a weekend or holiday, and then they are issued on the next business day. Why Investors Care
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Highlights
Results were a bit disappointing for the monthly five-year note auction, sold at a high yield of 3.970% that was 1.5 basis points above the when-issued note at the bidding deadline. The bid-to-cover also showed softness, down to 2.37 vs. 2.60 last month despite this month's slightly smaller $13 billion offering size. Bidding from non-dealers was likewise weak with only 29.6% of accepted competitive bids going to indirect bidders, well down from 49.9% last month. Bonds slipped following the results.
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Trends
![[Chart]](chart.gif)
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This chart reflects the monthly average yields for 5-year notes in the secondary market. These could be at slight odds with the auction averages in the primary market. |
Data Source: Haver Analytics
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