WASHINGTON – The
U.S. Department of the Treasury is offering $70 billion of Treasury securities
to refund approximately $63.5 billion of Treasury notes maturing on November
15, 2013. This will raise approximately
$6.5 billion of new cash. The securities
A 3-year note in the amount of $30 billion, maturing November
A 10-year note in the amount of $24 billion, maturing November
15, 2023; and
A 30-year bond in the amount of $16 billion, maturing November
The 3-year note will be auctioned on a yield basis
at 1:00 p.m. ET on Tuesday, November 12,
2013. The 10-year note
will be auctioned on a yield basis at 1:00 p.m. ET on Wednesday, November 13, 2013,
and the 30-year bond will be auctioned on a yield basis at 1:00 p.m. ET on
Thursday, November 14, 2013. All of these auctions will settle on Friday,
November 15, 2013.
balance of Treasury financing requirements will be met with the weekly bill
auctions, cash management bills, the monthly note and bond auctions, the November
10-year Treasury Inflation Protected Security (TIPS) reopening auction, the December
5-year TIPS reopening auction, the January 10-year TIPS auction, and the initial January 2-year
Floating Rate Note auction (FRN).
the August 2013 Quarterly Refunding, Treasury has incrementally reduced annual borrowing
capacity by $60 billion through gradual reductions in 2- and 3- year coupon
auction sizes. These reductions were in
response to the ongoing improvement in the budget deficit.
intends to maintain coupon issuance sizes at current levels over the coming
quarter. Treasury will continue to
monitor projected financing needs and will make adjustments to auction sizes as
Treasury intends to announce the details of the initial Floating
Rate Note (FRN) auction on Thursday, January 23, 2014, with the first auction
occurring on Wednesday, January 29, 2014. Settlement of the security will occur
on Friday, January 31, 2014.
The FRN is the first new product that Treasury has brought
to market in 17 years. The FRN will have
a maturity of two years and Treasury anticipates that the size of the first
auction will be between $10 and $15 billion.
Specific terms and conditions of each FRN issue, including the auction
date, issue date, and public offering amount, will be announced prior to each
more details about the new Treasury FRN product, including a term sheet, FRN
auction rules, and Frequently Asked Question, please see:
In addition, a tentative auction calendar that includes
Treasury FRNs can be found at:
Guidance for Treasury
Inflation Protected Security (TIPS) Issuance in 2014
Treasury has received feedback from some market participants
regarding the size and frequency of 5-year TIPS auctions. Specifically, some have suggested that smaller
and more frequent 5-year TIPS auctions would improve the liquidity of the
product. Treasury is studying the idea
of offering two new 5-year TIPS CUSIPS each year followed by either one or two
reopenings of each CUSIP. Treasury does
not expect to change the auction sizes of 10-year and 30-year TIPS in 2014.
Treasury welcomes additional feedback on whether such a
modification to the 5-year TIPS auction schedule would help us attain the
lowest cost of funding for the taxpayer.
Treasury will announce a decision regarding any change to the 5-year
TIPS auction schedule as well as any increase to its gross issuance at the
Quarterly Refunding on February 5, 2014.
The debt limit places a limitation on the total amount of
money that the United States government is authorized to borrow to meet its
existing legal obligations, including Social Security and Medicare benefits,
military salaries, interest on the national debt, tax refunds, and other
payments. Raising the debt limit does
not authorize new spending commitments; it simply allows the government to
finance existing legal obligations that Congresses and presidents of both
parties have made in the past.
Appropriations Act, 2014 suspended the debt limit through February 7, 2014. A new debt limit will be calculated on February
8, 2014 in the manner prescribed by the Act.
At that time, Treasury will have extraordinary measures available, which
will allow the government to continue to finance its obligations for a period
During the recent debt limit impasse, concerns that the debt limit would
not be increased before extraordinary measures were exhausted led to
significant disruptions in the secondary market for short-dated Treasury
securities and a measurable increase in borrowing costs for newly issued Treasury
bills. As such, Treasury respectfully
urges Congress to provide certainty and stability to the economy and financial
markets by acting to raise the debt limit well before February 7, 2014.
Please send comments and suggestions on these subjects or
others related to debt management to firstname.lastname@example.org. The next quarterly refunding announcement
will take place on Wednesday, February 5, 2014.