Business: Bond Flop

For the first time in more than a year, the U.S. Treasury last week tried to sell long-term bonds. The sale was a dud. Treasury offered 25-year bonds with 4¼% interest, the legal maximum imposed by Congress, hoped to sell at least $500 million worth, offered up to $1.5 billion. Only $370 million worth was sold. Another offer of $2 billion in 25-month notes was oversubscribed, thus more than meeting the Treasury's cash needs of $2.5 billion. Said a top Treasury official: "The response to the long-term issue shows conclusively that we simply cannot sell in this market with this ceiling....

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