Official Desk Model

US Treasury Bond Buyback Yield & Duration Impact Workbench

Reported by Financial Times • $6.0B Liability Management Program
Total Par Repurchased
$6.00 Billion
Cap: $6.00B Target Allocation
Annual Coupon Savings
$252.3 Million / yr
Retires high-coupon vintage paper
Weighted Avg Maturity Reduction
-0.42 Years
Reduces debt portfolio duration risk
Dealer Liquidity Score
88.4 / 100
Status: COMPLETED
Operation Parameters
$6.00B
$1.0B $6.0B (FT Program Cap)
2.5 bps
0.5 bps (Aggressive) 8.0 bps (High Premium)
Tranche Allocation (%) Total: 100%
10-Year Tenor (Avg Coupon 3.85%) 30%
$1.80B Par repurchased Yield: 4.12%
20-Year Tenor (Avg Coupon 4.20%) 40%
$2.40B Par repurchased Yield: 4.45%
30-Year Tenor (Avg Coupon 4.50%) 30%
$1.80B Par repurchased Yield: 4.68%

Treasury Yield Curve: Pre vs. Post-Buyback

Simulated yield decompression and liquidity relief along the long end

Pre-Buyback Baseline
Post-Buyback Curve
Tenor Par Amount Alloc % Avg Coupon Pre Yield Post Yield Duration Annual Savings

Debt Management Rationale

The US Treasury's buyback program is designed to provide targeted liquidity support in off-the-run securities and improve debt issuance predictability. By purchasing less liquid, seasoned off-the-run long-term debt (10Y to 30Y) funded via current on-the-run bills and benchmark notes, Treasury compresses liquidity concession spreads and trims overall portfolio duration risk.

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