Like corporate bonds, Treasury notes and Treasury bonds are quoted in the secondary market on a price basis where one point equals one percent of par. Unlike corporate bonds, whose percentages are split into 8ths of a percent, government securities are split into units of 32nds. A price quote of 98-16 refers to a price of 98 16/32% of par value, or 98.50% of par. If the Treasury bond had a par value of $1,000, the bond would sell for $985.00.
A price of 103-08 refers to a price of 103 8/32% of par, or 103.25% of par. A Treasury bond with a par value of $1,000 would sell for $1,032.50. Some very active bonds may be quoted in 64ths of a point, which is indicated by a plus sign (+) following the quoted price. A quote of 98-13+ refers to 98 plus 13/32 plus 1/64, or 98 27/64.
A typical bond holding looks like this in the trade papers:
Maturity
Coupon
Bid
Ask
Change
Ask Yield
11/15/21
2.0
103-20
103-20+
-14
1.561
This is a 2% bond maturing on November 15, 2021. The ask price is 1/64 of a point higher than the bid, and the bond is trading at a premium; the ask price is 103 41/64, or 103.641. The “Change” column refers to the difference between the current trading day’s bid price and the bid price of the preceding trading day. It indicates a decrease in the bid price of 14/32 of a point. “Ask Yield” is the annualized percentage return to be received if the bond is purchased that day at the ask price and held until maturity.
