Treasury notes, or T-notes, are a type of securities issued by the U.S. Department of Treasury. The maturity of T- Notes is between two and ten years and they are comprised in the category of coupon securities. Indeed, T-Notes, as it also occurs with Treasury bonds, pay interest every six months plus face value (maturity value) at maturity. The purchase price may be greater than, smaller than, or equal to the face value of the note. T-Notes are purchased in two ways: by submitting a competitive bid, through a bank, broker, or dealer, or by submitting a non-competitive bid through a bank, broker, or dealer, or alternatively through an account in Treasury Direct and Legacy Treasury Direct. In particular, it is possible to use the latter financial services website, created by the U.S. Department of the Treasury Bureau of the Public Debt, because all treasuries are now issued and held electronically. In case of competitive bidding, an investor can buy up to 35% of the initial offering amount (to guarantee a sufficient level of competition in the secondary market), while for non-competitive bidding, there is a limit on the purchase of $5 million. Investors are also allowed to sell T-Notes before maturity. In the primary market, the yield of a T-Note is determined in an auction, and in the secondary market they are quoted on a price basis.

Editor: Bianca GIANNINI
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