WASHINGTON -- The Treasury yesterday sold $10.5 billion of five-year notes at an average yield of 5.56%, down from the 6.43% incurred in the previous sale on June 24, and the lowest since the the Treasury began auctioning five-year notes in 1977.

The coupon rate was 6 3/8%, down from 6 3/4 at the previous auction. The average price was 99.741.

The Treasury received $25.18 billion in bids and accepted those in a range of 5.54% to 5.57%, including $945 million of noncompetitive bids at the average return. The Treasury accepted 45% of the bids at the highest return.

The Treasury sold an additional $1.28 billion to government and Federal Reserve banks as agents of foreign and international monetary authorities, in exchange for maturing securities. In addition, $300 million ws accepted at the average price from government accounts and Federal Reserve banks for their own account, in exchange for maturing securities. The additional notes were sold at the average price.

The notes will mature July 31, 1997.

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