Treasury to Bring Back 30-Year Bond
WASHINGTON - After a nearly four-year absence, the 30-year Treasury Bond will be making a comeback. President Bush announced on Aug. 3 that bringing back the bond may help finance the nation's debt while appealing to investors who need a supposedly safer and longer-term investment alternative. The Treasury Department said the first auction of the 30-year bond will take place in the first quarter of 2006, with auctions held twice a year. The Treasury stopped selling new 30-year bonds in 2001 during a period when the federal government planned on budget surplus and a reduced national debt. Investors appeared to be waiting on the bond to come back, according to a survey from the Bond Market Association, a trade organization. Nearly 91% of investors polled said they would be more inclined to trade long-term securities if the Treasury brought back the 30-year bond. Industry watchers say the bond's comeback will put in place a familiar benchmark that could help the market determine how much interest to charge riskier borrowers including companies and foreign governments.