By Saqib Iqbal Ahmed
NEW YORK (Reuters) – Investors expect robust demand for the Treasury Department’s new $20 billion issue of 20-year bonds, set to launch Wednesday, from U.S. institutions, foreign investors and other market participants.
Here’s a quick look at how much debt the U.S. has issued over the last few years and who has been buying:
PUMP UP THE VOLUME
The government’s borrowing needs have jumped dramatically in recent weeks, after Congress authorized trillions in spending to fend off an economic hit from the coronavirus pandemic, which has slammed U.S. growth. The U.S. plans to sell a total of $54 billion of the 20-year bonds over the next three months.
The Treasury said earlier this month it intends to increase auction sizes across all nominal coupon tenors over the May-to-July period, with the increases larger in the 7-year, 10-year, 20-year and 30-year categories. The largest increase will be on the 10-year note.
U.S. national debt now stands at more than $25 trillion, up 15% since a year ago, according to U.S. Treasury Department data.
(Graphic: Monthly U.S. Treasury issuance by tenor – https://fingfx.thomsonreuters.com/gfx/mkt/nmovangbwpa/Monthly%20issuance%20of%20UST%20by%20tenor.jpg)
Traditionally, dealers and brokers, investment funds and foreign investors account for the purchase of most of the longer-dated bonds auctioned by the U.S. Treasury, according to a Reuters analysis of SIFMA data.
(Graphic: 30-year note: Auction allotments by investor class – https://fingfx.thomsonreuters.com/gfx/mkt/rlgvdwyqdpo/30%20year.jpg)
(Graphic: 10-year note: Auction allotments by investor class – https://fingfx.thomsonreuters.com/gfx/mkt/xegpbkdbzvq/10%20year.jpg)
About 65% of U.S. debt is held domestically by the Federal Reserve, pension funds, mutual funds and other U.S. investors.
Foreign holdings of U.S. Treasuries stood at $6.81 trillion in March, after hitting an all-time peak of $7.066 trillion the previous month, Treasury Department data showed.
Japan, the largest non-U.S. holder of Treasurys, owned $1.271 trillion in March. China, the second-largest foreign holder, held $1.081 trillion.
(Graphic: Holders of U.S. Treasury securities – https://fingfx.thomsonreuters.com/gfx/mkt/bdwvkrwyrpm/UST%20holders.jpg)
(Reporting by Saqib Iqbal Ahmed; Editing by Leslie Adler)
