30-Year Long US Treasury Bond
In October 2001 the US Treasury's 30-year bond was again issued. This bond is commonly called the "long" or "long bond". The Treasury plans to organize the first auction for it in the first quarter of 2006. After this every year the Treasury will hold two additional auctions on which this long bond will be traded.
The long bond is preferred by many investors for its security. Additionally, it provides a long-term interest rate that can greatly enhance investors' portfolios.
Since at this time long bonds are offered only at the secondary market, an investor who is willing and able to purchase a long bond will have to find another investor who holds such and try to persuade him/her to sell it.
The long bond is generally used by the US government to fund short-term debt by using the long-term fixed bonds. Since short-term interest rates are increasing, when the time comes to re-finance the debt the interest rates will be even higher for certain.
This is the main reason why many individual investors as well as insurance companies and pension funds are searching for such an investment tool as long bonds to provide them with secure interest rates.
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