By: Michael E. Martinez

Yesterday, the 30 year bond made its first debut in five years. The new bonds drew a yield of 4.53 percent, the lowest on record for a 30-year bond and below the 4.579 percent pre-auction average forecast. The 65.4 percent share of the 30-year bonds purchased by so-called indirect bidders was higher than many strategists expected.

Some investors balked at buying 30-year bonds at yields below those on short-maturity Treasuries. The bid-to-cover ratio, which measures the amount of bids received versus the amount sold, was 2.05, compared with the average of 2.25 at the last 10 auctions of 30-year bonds. However, individual investors can buy these 30-year bonds at the treasury's website. The Treasury had suspended sale of the security in October 2001, saying it was no longer needed for government finances. At the time, Treasury was stepping up its short-term borrowing in the wake of the Sept. 11, 2001, attacks that had deepened an economic downturn and helped wipe out a brief period of budget surpluses.

But the government maintained it did not need the long bond because the long-term budget outlook was strong. Since then, however, U.S. budget deficits have soared with the costs of wars in Afghanistan and Iraq and provision of relief to hurricane-hit U.S. Gulf Coast states, leading to a projected $423 billion deficit for the fiscal year that ends Sept. 30. The Treasury said last May it was considering bringing the long bond back to give it a broader borrowing range.