U.S. Treasury to keep coupon sizes steady, studying ultra-long bonds

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[May 03, 2017]   WASHINGTON (Reuters) - The U.S. Treasury said on Wednesday it will keep coupon auctions steady in the upcoming quarter and that it is studying the possibility of issuing ultra long-term bonds.

 

"Treasury intends to maintain coupon issuance sizes at current levels over the upcoming quarter," Acting Assistant Secretary for Financial Markets Monique Rollins said in a statement.

In its quarterly refunding announcement, Treasury also said it would auction $62 billion in coupon debt next week.

On Monday, Treasury said it expects to raise $26 billion through credit markets during the April-June quarter, up $24 billion from its initial estimate early in the year.

Treasury Secretary Steven Mnuchin said in an interview with Bloomberg Television on Monday that his department is looking into the issuance of ultra long-term bonds, or those with maturities beyond 30 years.

"We have a working group looking at it," Mnuchin said. "We think that it's something that could absolutely make sense for us at Treasury."

In minutes of Tuesday's Treasury Borrowing Advisory Committee meeting, also released Wednesday, the committee suggested other ways Treasury might tap demand from long-duration investors, such as considering issuing a zero coupon 50-year bond, and reintroducing the 20-year bond.

(Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci)

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