High Demand for Floating-Rate Treasury Notes

Bid-to-cover ratio for latest floater auction was 4.67, more than 50 percent higher than bid-to-cover on recent auctions of fixed-rate debt.

Floating-rate notes are proving to be a success, with the U.S. Treasury’s first new debt offering in 17 years being scooped up at auction by investors seeking an alternative money-market security.

The U.S. sold $13 billion of floaters yesterday at a bid-to-cover ratio, which gauges demand by comparing the amount of bids with the amount of securities offered, of 4.67, higher than the 2.9 average of fixed-rate debt sold this year by the government. It was the third sale since the inaugural floating-rate auction on Jan. 29.

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