Checking in on today’s 30-year TIPS auction

The Treasury’s reopening of CUSIP 912810RF7 at auction today will create a 29-year 8-month TIPS with a coupon rate of 1.375%. Non-competitive bids (like those made through Treasury Direct) must be received by noon; competitive bids close at 1 p.m.

This one is going to be pricey, because yields have fallen sharply since the initial Feb. 20 auction created a coupon rate of 1.375%.

  • Bloomberg’s Current Yields chart is showing CUSIP 912810RF7 trading today with a yield of 1.08% and a cost of $107.59 for $100 of value, a more-than 7% premium over par.
  • The Wall Street Journal’s closing price chart is showing it closed yesterday at 1.098% and a cost just under $107.
  • The Treasury’s Yield Curve site shows a full-term 30-year TIPS yielding 1.11%.
  • The TIP ETF, which holds a broad range of maturities, is trading today at $114.59, up 0.2%. This indicates solid demand for TIPS and slightly declining yields.

Wild guess prediction. So it looks like this auction will result in yield around 1.08% and price that’s around 7% over par, meaning $10,000 of this TIPS will cost you $10,700.

I’ll be posting after 1 p.m. with the auction results.

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