WASHINGTON -- The Treasury yesterday sold $17.01 billion of two-year notes at a yield of 5.94%, up from the 5.59% yield incurred in the previous auction on April 27 and the highest since the 6.01% incurred on Oct. 23, 1991.

The coupon rate was 5 7/8%, up from 5 1/2% in the previous auction. The price was 99.879.

In the Dutch auction, all competitive tenders at yields below 5.94% were accepted in full. Buyers who bid at the high yield of 5.94% were allotted 28% of their total bids. The median yield was 5.91%, and the low yield was 5.87%.

Tenders totaled $39.11 billion and the Treasury accepted $17.01 billion, including $1.42 billion of noncompetitive bids.

Federal Reserve banks bought $1.37 billion of the securities, as agents for foreign and international monetary authorities in exchange for maturing securities. The Fed banks also bought $450 million for their own account in exchange for maturing securities.

The notes will mature May 31, 1996.

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