U.S. Treasury launches new 20-year bond to help fund record borrowing needs this quarter

According to the release of the U.S. Department of the Treasury, it is offering $96 billion of Treasury securities to refund approximately $57 billion of privately-held Treasury notes and bonds maturing on May 15, 2020. This issuance will raise new cash of approximately $39 billion. The securities are:

A 3-year note in the amount of $42 billion, maturing May 15, 2023;
A 10-year note in the amount of $32 billion, maturing May 15, 2030; and
A 30-year bond in the amount of $22 billion, maturing May 15, 2050.

Treasury also announced intention to increase auction sizes across all nominal coupon tenors over the May-to-July quarter. The increase in coupon issuance will be larger in longer tenors (7-year, 10-year, 20-year, and 30-year).

According to the Treasury, the initial offering size of the 20-year bond will be $20 billion and that the auction will take place on Wednesday, May 20, 2020, at 1:00 p.m. EDT. As outlined in the previous refunding statement, the security will have a dated date of May 15, 2020, and the maturity date will be May 15, 2040. The security will settle on Monday, June 1, 2020, because May 31, 2020, is a Sunday.

Treasury anticipates reopening the 20-year bond in both June and July in amounts of $17 billion for each auction. This security will raise an additional $54 billion in new cash over the quarter. Additional details for the auction of the 20-year bond offering will be announced on Thursday, May 14, 2020 at 11:00 a.m. EDT.

The anticipated changes in auction sizes are presented in the table below in $ billion:

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