Whatever the reason, those bonds trade with a yield of about 4.12%. A market-wide increase in yields before the auction that raised the probability of an unscheduled reopening should erode that scarcity value. /END

As for the existing 30Y bonds, the expectation is they'd lose scarcity value. It may be that because they were the first ones in five years, pent-up demand caused a chunk of the issue to go into escrow accounts, driving up the value of the rest. 10/

An issue of that size is unlikely ever to command "special" rates in repo, meaning that the cost of financing a long position would stay near the general rate and not go lower. 9/

First, the total size of the issue would increase. It's scheduled to be $120b ($45b new issue plus two $39b reopenings in March and April). Merging it with the old 30Y would add $26b, and the Fed is expected to take an additional $12b to replace its maturing Treasuries. 8/

If it were to happen, though, there would be a couple of implications. 7/

At the moment, an unscheduled reopening looks unlikely, because the auction yield would need to be in the 4.500%-4.624% range, and it's indicated around 4.21%. Even with the January jobs report being released several hours before the auction, that's a tall order. 6/

There are no 30Y bonds maturing between 2031 and 2036, giving 10Y debt sold between 2021 and 2026 unique maturity dates. 5/

But there hasn't been an unscheduled reopening of a 10Y in at least a decade. And for the last 5 years, there's been no possibility of one, because the US stopped selling 30Y bonds in 2001 until 2006. 4/

This happens regularly, especially for 5Y notes, which have maturity dates in common with 7Y notes sold two years earlier. 3/

An unscheduled reopening happens when a Treasury security is sold that matures on the same date as an existing one & is assigned (via the auction result) the same coupon rate. Rather than getting its own CUSIP number, the new debt gets merged with the existing debt. 2/

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