Treasury Notes

 Mark Your Calendars: Treasury Expects To Hold First Floating Rate Note Auction In January 2014

By: Matthew Rutherford

Treasury announced today that it will hold the inaugural Floating Rate Notes (FRNs) auction in January 2014, making FRNs the first new Treasury security since we introduced Treasury Inflation-Protected Securities (TIPS) more than 15 years ago.
FRNs will complement Treasury’s existing suite of securities, which include Treasury bills, notes, bonds, and TIPS.  Treasury’s introduction of FRNs will provide a number of benefits to taxpayers including assisting Treasury in managing the maturity profile of the nation’s marketable debt outstanding, expanding Treasury’s investor base and, most importantly, helping to finance the government at the lowest cost over time. FRNs are a unique and attractive option for investors because the security features an interest payment that can adjust over time. 
Treasury will provide additional information regarding the potential size of the first FRN auction at the November Quarterly Refunding.
Click here for an FAQ on this new product and here to view the Final Rule on FRNs published today in the Federal Register.

Matthew Rutherford is the Assistant Secretary for Financial Markets at the U.S. Department of the Treasury.
Posted in:  Financial Markets
Bookmark and Share