The Treasury Department Monday auctioned $35 billion of two-year notes with a 1/8% coupon at a 0.240% yield and a price of 99.771630.

The bid-to-cover ratio was 3.45%

Tenders at the high yield were allotted 91.24%.

The median yield was 0.229%. The low yield was 0.166%.

Tenders totaled $120,756,451,400 and the Treasury accepted $35,000,009,000, including $165,281,400 of noncompetitive.

The Federal Reserve banks also purchased $1,133,425,000 for their own accounts in exchange for maturing securities.

The two-year notes are dated Jan. 3, 2012, and due Dec. 31, 2013.

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