If china wants to sell the t-bills/bonds back to the US, say tomorrow or next year, does the US government HAVE to buy them back?
Is The Us Government Obligated To Buy Back T-bills/bonds Back From China At Any Moment China Wants To Sell?
| 2009.11.07 | Investing | Back | China | From | Government | Moment | Obligated | Tbills/bonds | Wants
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November 8th, 2009 at 1:03 am
No. In fact, the US Government doesn’t “buy them back” until the maturity date. If China wants to sell them, they need to find someone in the secondary market to buy them from them.
In order for them to make the US government buy them back, the bonds would have to have a Put feature. Treasuries do not have embedded puts.
November 8th, 2009 at 2:14 am
you bet ye, and that would be a real disaster.
November 8th, 2009 at 8:19 am
When you buy a T-bills/bonds, there is a maturity date. The US government is only obligated to pay on maturity date. Any time in between depends on the market demand and supply along with the fluctuation of interest rates. China can sell T-bills/bonds provided that there is a buyer.