A Question

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Some years ago, I signed up for U.S. Treasury press releases regarding bond and note sales. I don’t remember why I did this, and generally I never bothered to read the e-mails.

But they are kinda interesting. This morning, the Treasury announced the result of several recent bond and note auctions, and I noticed something that strikes me as odd. For example, this morning, the Treasury announced that a recent sale of 13-week notes lists total tendered at about $73.5 billion and total accepted at $26 billion. Does this mean there were no takers for the remaining notes/bills/bonds (roughly $47 billion)? I looked at data going back to the late 1990s suggesting that, on average, total accepted tends to be 1/2 to 1/3 of the total tendered amount.

Term: 13-Week
High Rate: 0.460%
Investment Rate*: 0.467%
Price: $99.883722
Allotted at High: 88.35%
Total Tendered**: $73,502,839
Total Accepted**: $26,000,014
Issue Date: 10/09/2008
Maturity Date: 01/08/2009
CUSIP: 912795J69

*Equivalent coupon-issue yield
**In thousands

Does this mean that the remainder goes unsold? If the government “needs” [sic] that money, where does the remainder come from? Maybe someone out there with a better grasp of this could explain it to me.

1:59 pm on October 6, 2008