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Treasury Reintroduces 30-Year Bond

In August of 2005, Treasury announced the reintroduction of the 30-year bond. Treasury held its first auction of the bond in five years on February 9, 2006. The previous 30-year bond auction had taken place on August 9, 2001.

The 30-year bond was reintroduced to diversify Treasury’s funding options and expand its investor base. The reintroduction of the bond also was to stabilize the average maturity of the public debt. Before the reintroduction of the 30-year bond, the 20-year TIPS was the longest dated marketable security issued by Treasury.

The 30-year bond had long been a favorite of fixed income market participants seeking to match assets to future liabilities. The bond also had served as an important benchmark by which other long-dated securities were measured.