Treasury is at least doubling the size of the operations in which it buys back its own long-dated bonds, and it did not wait for the quarterly refunding to say so

The next quarterly refunding is on 4 November. Treasury did not wait for it.

In a release dated 19 August, the department said it is increasing, by at least double, the size of its liquidity support buyback operations in longer-dated nominal coupon securities. The maximum has been $2bn per operation. It becomes at least $4bn. Two sectors are covered, the 10-year to 20-year and the 20-year to 30-year.

The change takes effect on 9 September and runs for the rest of the current refunding quarter, which ends on 4 November. Treasury said it will say more about future buyback sizes at the refunding that day.

The reason Treasury gives

The department attributed the increase to a desire to provide greater liquidity support in the longer-dated nominal sectors, where it said there is consistent strong sponsorship from market participants. Its evidence for that, on its own account, is the volume of high-quality offers it routinely receives in longer-dated operations.

That is the whole of the stated rationale, and it is worth reading precisely. Treasury is describing an operation that has been oversubscribed with paper it wants to buy, not an operation that has been struggling. A buyback is the government purchasing outstanding securities back from holders, and the liquidity support programme exists to give holders of older, less traded issues a place to sell them.

What is still missing

An updated tentative buyback schedule has not been published. The release says one will come later, which means the specific operation dates inside the 9 September to 4 November window are not yet public, and neither is the number of operations that will run at the new size.

The release gives no yield, no spread and no market figure of any kind, and none is supplied here.