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T-bonds are also publicly auctioned at  issue and have an active secondary market.

Treasury bonds  also frequently trade at a premium to the par value of the  bond because the revenue stream from the coupons is  greater than the interest that can be achieved from other  high credit-rated investments.

Long bonds with higher  interest-rate coupons that were auctioned during periods of  higher interest rates will trade at a substantial premium to  the par value during periods when current interest rates are  low.

As an example a 6 percent 30-year T-bond that has, say,  15 years left, may trade at 120 percent of par value when  interest rates are lower. In contrast, as interest rates rise, the  secondary market value of long bonds will fall.