WASHINGTON -- The Treasury yesterday sold $17.01 billion of two-year notes at a yield of 4.27%, up from the 3.94% yield incurred in the previous auction on Oct. 25 and the highest since the 4.28% incurred on Jan. 26.

The coupon rate was 4 1/4%, up from 3 1/8% in the previous auction. The price was 99.962.

In the Dutch auction, all competitive tenders at yields below 4.27% were accepted in full.

Buyers who bid at the high yield of 4.27% were allotted 47% of their total bids. The median yield was 4.25%, and the low yield was 4.20%.

Tenders totaled $46.58 billion and the Treasury accepted $17.01 billion, including $585 million of noncompetitive bids.

Federal Reserve banks bought $967 million of the securities, as agents for foreign and international monetary authorities, in exchange for maturing securities. The Fed banks also bought $596 million for their own account in exchange for maturing securities.

The notes will mature November 30, 1995.

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