Treasury Notes

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MarketWatch  Jun 2  Comment 
The yield for the 10-year note slipped after a weaker-than-expected nonfarm payrolls number.
MarketWatch  Apr 4  Comment 
The $10.8 billion Alerian MLP exchange traded fund is riding the U.S. pipeline boom, writes Phil van Doorn.
Yahoo  Feb 25  Comment 
Jeffrey Gundlach, chief executive of DoubleLine Capital, said on Friday he expects the yield on the benchmark 10-year U.S. Treasury note to drop below 2.25 percent as global investors seek safety. "There is a stealth flight to safety going...
MarketWatch  Sep 9  Comment 
An auction of 10-year U.S. Treasury notes received strong demand Wednesday afternoon. The yield on the auctioned notes was 2.235%, down 0.9 basis point from the 10-year yield immediately before the results were released. Indirect bidders, a proxy...




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Treasury bills, notes, and bonds are examples of default-free securities. Treasury notes (or T-Notes) mature in two to ten years. They have a coupon payment every six months, and are commonly issued with maturities dates of 2, 5 or 10 years, for denominations from $100 to $1,000,000.

Treasury notes and bonds operate differently from a Treasury Bill. A note denotes a security with a date of maturity larger than one year up to ten years. A bond is a security that exceeds ten years in maturity. Notes are offered in lengths of two, three, five, and ten years. Bonds are only offered in a length to maturity of thirty years.

Treasury notes and bonds pay coupon payments every six months including the final date of maturity. For example, if you purchased a $100,000 two-year Treasury note on January 15 2008 at an annual rate of 5%, then your income stream would look like this:

Date Income ($)
7/15/08 2,500
1/15/09 2,500
7/15/09 2,500
1/15/10 102,500

Inflation-Protected Treasury Notes and Bonds

The U.S. government also offers inflation-indexed notes and bonds, also known as TIPS (Treasury Inflation-Protected Securities). They are offered in lengths of five, ten, and twenty years to maturity. While the interest-rate payments stay the same, they are applied to the principal, which is adjusted for inflation every six months.

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