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Treasury Auctions Twenty-Year Bonds For First Time Since 1986

In the first twenty-year bond auction since 1986, the Treasury Department sold $20 billion worth of twenty-year bonds on Wednesday.

The twenty-year bond auction drew a high yield of 1.220 percent and a bid-to-cover ratio of 2.53.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The reintroduction of the twenty-year bond comes as the government seeks to the extend the time it has to pay off its record debt as deficits skyrocket due in part to the coronavirus crisis.

Treasury Secretary Steven Mnuchin said during congressional testimony on Tuesday that he intends to expand government financing with more ten, twenty and thirty-year bonds.

"What I'd like to do is lock in a significant amount of very low interest rates so that the money we are borrowing can be paid back and dealt with over a long period of time," Mnuchin said.

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