Today's $35 billion 5 Year auction was not very pretty: coming at a high yield of 1.04%, it was a tail to the When Issued trading 1.03% at 1pm, and the highest rate since October's 1.055%, and the first 1%+ print in 2012. Also notable was the drop in the Bid To Cover to 2.85, which in turn was the lowest since the 2.71 in August of last year. Aside from that the internals were in line: Directs took down 11.3%, in line with the 11.4% average, Indiricts 41.9%, just below the 42.8% TTM average, and the remainder was Dealers, whose 46.8% allocation was just slightly lower than the 45.8% they have taken down previously. All in all another auction that squeezed by courtesy of the PD syndicate, which as has been noted before, is already loaded to the gills with the short-term bonds that Uncle Ben is selling. More importantly, this is the auction that in conjunction with tomorrow's last of three, will send total US debt higher by another $39 billion and brings it to a fresh record high $15.6 trillion. There is now about $700 billion in debt issuance capacity before the debt ceiling is breached again. At this run rate, this is just under 6 months before the debt ceiling scandal ramp up again, or just in time to be used by the GOP as the biggest trump card in the Obama reelection debates, just as we suggested here first back in February.