High yield 4.927% WI level at the time of the auction 4.937% Tail -1.0 basis points Bid to cover 2.75X Directs (domestic demand) 19.9% Indirects (international demand) 73.2% Dealers 18.5% Auction Grade The 20 year issue is not a major interest for investors.
High Yield The high yield is the highest yield accepted at the auction and becomes the yield awarded to all successful bidders
Higher-than-expected yield = weaker demand. Lower-than-expected yield = stronger demand. Tail (6 auction average -0.2 bps) The tail measures the difference between the auction’s high yield and the yield where the bond was trading just before the auction (the “when-issued” yield).
Positive tail (high yield above WI yield) = weaker auction. Negative tail or stop-through (high yield below WI yield) = stronger auction. Example: WI yield: 4.50% Auction high yield: 4.53% Tail: +3 basis points (weak) Bid-to-Cover Ratio (6 auction average 2.41X) The bid-to-cover ratio measures total bids received relative to the amount offered.