The U.S. Treasury accepted $4.078 billion of offers to buy back outstanding 20- to 30-year Treasury securities on Thursday, September 24, falling short of the operation’s $6 billion maximum. The securities were scheduled to settle Friday, September 25, according to the Treasury buyback schedule and the TreasuryDirect buyback results record.
Treasury received $10.468 billion of offers in the operation, meaning offers were about 1.74 times the $6 billion maximum, an Investozora calculation. The accepted amount represented about 67.97% of the maximum purchase amount. The operation covered nominal coupon securities with maturities ranging from September 25, 2046, through September 24, 2056.
This was a liquidity-support buyback rather than a conventional Treasury debt auction. Treasury’s aggregate buyback results report the amount offered, the amount accepted and weighted-average accepted prices by security; they do not use the standard auction measures of high yield, bid-to-cover, or direct and indirect bidder participation. Treasury says buyback offers are evaluated based on their proximity to prevailing market prices and relative value. Its buyback FAQs explain the operation and acceptance process.
How the Operation Compares
The result differed from Treasury’s previous 20- to 30-year liquidity-support operation on August 18. That operation had a $2 billion maximum and accepted the full $2 billion after receiving about $19.868 billion of offers. The September 24 operation therefore involved a much larger purchase ceiling but a substantially smaller offer-to-cap ratio.
Treasury expanded the maximum size of its longer-dated liquidity-support buybacks from $2 billion to at least $4 billion beginning September 9, saying the increase was intended to provide greater liquidity support in longer-dated nominal sectors. Investozora previously covered that expansion and its implications for the long end of the Treasury market in its report on the Treasury’s expanded bond buyback program.
The buyback came as long-term Treasury yields remained elevated. Treasury’s September 24 daily par-yield data showed the 20-year yield at 5.53% and the 30-year yield at 5.47%, compared with 5.45% and 5.40%, respectively, on September 23. The yield movements occurred alongside the operation but do not by themselves establish that the buyback caused them.
For broader context on how Treasury financing works and why changes in the maturity profile matter for borrowing costs, see Investozora’s Treasury borrowing explainer. Treasury’s buyback announcement and results database provides the underlying operation records.
