REVISED TREASURY NOTES SOLD : 10-YEAR SECURITIES HEDGED FOR INFLATION.Byline: John D. McClain Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. The government sold $7 billion in securities Wednesday that for the first time are designed to prevent inflation from eroding the value of people's investments. The 10-year Treasury notes were auctioned in minimum denominations of $1,000 with an interest coupon rate Coupon rate In bonds, notes, or other fixed income securities, the stated percentage rate of interest, usually paid twice a year. of 3-3/8 percent. The rate was determined by the bidding of auction participants. The notes' principal will be adjusted twice a year for inflation as measured by the Labor Department's Consumer Price Index. For instance, if inflation increases 3 percent this year, a $1,000 note would be adjusted upward to $1,030. Interest will be paid semiannually sem·i·an·nu·al adj. Occurring or issued twice a year. sem  i·an based on the inflation-adjusted value of the security at the time. Analysts had predicted that most participants in the initial auction would be Wall Street traders and institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. such as pension funds rather than individuals. ``It doesn't look like small investors Small investor An individual person investing in small quantities of stock or bonds. This group of investors makes up a minimal fraction of total stock ownership. small investor really stepped up here,'' economist Elliott Platt of Donaldson, Lufkin & Jenrette Securities Corp. in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of said after the auction. Still, he said the sale was a success. Treasury officials agreed. ``It was a very good start to a program that's going to be very big,'' Deputy Assistant Secretary Roger Anderson told reporters. The Treasury said bids totaled $37.2 billion, more than five times the bonds sold. Eventually, Treasury officials expect more participation by middle-class investors interested in preserving their investments while earning interest. |
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