US auctions of $62 billion of seven year notes at a high yield of 1.05%

• High yield 1.05% versus WI level of 1.04%. The tail is +1 basis point
• Bid to cover 2.23x versus six month average of 2.27X
• Dealers 22.18%, versus six month average of 24.1%
• Directs 19.45% versus six month average of 19.8%
• Indirects 58.3% versus six month average of 56.0%

Highlights and low lights of the auction:

• The auction required a one basis point tail above the WI level to attract buyers
• The bid to cover was slightly lower than the six month average despite the higher yield
• Indirects took more than what they typically do. Indirects our a proxy for overseas bidders
• Domestic Direct bidders came in close to the 6-month average
• The dealers were saddled with less than normal thanks to the overseas demand

Overall a grade of D to D+.