US Treasury to Extend Debt Maturity

The U.S. Treasury on Wednesday said the average maturity of its outstanding debt had risen to almost 65 months at the end of 2012, up 34% since an October 2008 trough. That is the longest average maturity in a decade.

The trend looks set to continue. Under current policies, the average maturity of debt is set to rise to 80 months by 2022.

The Treasury Borrowing Advisory Committee, composed of executives from some of Wall Street’s largest banks and bond investors, at its most recent meeting explored more aggressive measures to extend the maturity even faster.

Scenarios under consideration included the issuance of the 50-year and 20-year bonds. “While no consensus emerged, the committee was comfortable that maintaining the current maturity structure of new issuance will already extend the [ weighted average maturity] from 65 months to 80 months by 2022,” minutes of the Tuesday meeting show.

via Nasdaq

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