US non-comp bids for 1yr 11mo FRNs at $17.4 mln

US non-comp bids for 1yr 11mo FRNs at $17.4 mln

U.S. Non-Competitive Bids for Four-Month Bills Reach $451.1 Million in Latest Auction
The U.S. Treasury’s February 12, 2026, auction of four-month bills attracted $451.1 million in non-competitive bids, representing 6.5% of the $6.9 billion offering size. Non-competitive bids, which allow investors to purchase securities at the auction’s accepted rate without affecting pricing, remain a key feature of Treasury auctions, particularly for individual investors and money-market funds seeking liquidity.

The auction reported a bid-cover ratio of 2.97, reflecting moderate but stable demand. The high rate accepted was 3.595%, a slight increase from 3.590% in the prior week’s auction. This uptick aligns with broader trends of rising yields on short-term Treasuries, driven by the Treasury’s strategy to rebuild its cash balance following the July 2025 debt ceiling resolution.

The Treasury has increasingly prioritized short-term securities, such as four-week and four-month bills, to manage borrowing costs amid elevated long-term yields. Secretary Scott Bessent has emphasized avoiding larger sales of longer-dated debt, which carry higher interest expenses. Analysts anticipate further growth in bill issuance, with TD Securities’ Gennadiy Goldberg noting that “bill auction sizes are only likely to grow further” in the coming years.

With U.S. money-market funds holding $7.4 trillion in assets, demand for short-term, low-risk securities like T-bills remains robust. The latest auction underscores the Treasury’s reliance on short-term debt to fund the federal deficit, a strategy expected to continue as policymakers balance fiscal needs with market stability. While concerns about oversupply persist, current demand metrics suggest no immediate disruption to the Treasury’s borrowing plans.

This auction highlights sustained investor confidence in short-term government debt, even as the Treasury navigates an evolving interest rate environment.