Definition Treasury notes are sold at regularly scheduled public auctions. The competitive bids at these auctions determine the interest rate paid on each Treasury note issue. Twenty-three primary dealers are authorized and obligated to submit competitive tenders at Treasury auctions. Dealers can hold, resell, or trade the securities with other firms. The Treasury announces the amount, date and time of the 10-year note auction four times a year - on the first Wednesday of February, May, August and November. The note is auctioned the following week, usually on Thursday and it is issued (settled) on the 15th of the month. If the 15th falls on a weekend or a holiday, it is issued on the next business day. The U.S. Treasury also announces a re-opening* of the 10-year note at the beginning (usually the second week of the month) of March, June, September, and December. The 10-year note is then auctioned later in the week (usually on Thursday) and issued on the 15th of the month with the same exception if it is a weekend or holiday. **According to the Treasury, "In a reopening, we issue an additional amount of a previously-issued note. The reopened security has the same maturity date and interest rate as the original security; however, compared to the original security, the reopened security has a different issue date and usually a different purchase price. If the price determined at the reopening exceeds the par value of the security, you will owe a premium. Also, when buying a reopened security, you must pay the interest the security earned before you bought it; however, we will pay this interest -- it's called "accrued interest" -- back to you in your first semiannual interest payment." Released on 06/08/2006 Yield Awarded 4.975 % Highlights Demand was solid for the Treasury's reopening of the May 2016 10-year note, showing a bid-to-cover ratio of 2.73, well above the 2.25 long term average. The high yield of 4.975 percent was about as expected. But interest from non-dealers was soft as only 14 percent of accepted competitive bids came from indirect bidders, half the long term average. Building Fedspeak pointing to a month-end rate hike has hurt short-term notes but has helped the long-term end where the yield on the 10-year note has edged lower through the week. High short-term rates and with it slower economic growth lower the risk of inflation. Bonds firmed after the auction. Trends This chart reflects the monthly average yields for 10-year notes in the secondary market. These could be at slight odds with the auction averages in the primary market. Data Source: Haver Analytics Consensus Data Source: Market News International Legal Notices | © 1998-2006 Econoday, Inc. All Rights Reserved.