Rate Note Auction Marks Introduction of First New Treasury Security in 17 Years
WASHINGTON – The
U.S. Department of the Treasury’s Bureau of the Fiscal Service today announced
details of the first Floating Rate Note (FRN) auction, a new type of marketable
security with a floating interest rate that resets each day and makes coupon
payments each quarter. Today’s announcement marks the first new security
Treasury has offered since Treasury Inflation Protected Securities (TIPS) were
first auctioned in 1997.
“Floating Rate Notes bring
additional diversity to Treasury’s current portfolio and help support our goal
of saving taxpayer dollars by financing the government’s borrowing needs at the
lowest cost over time,” said Under Secretary for Domestic Finance Mary J.
Miller. “Over the past three years, Treasury has worked closely with market
participants to design the FRN program and we appreciate their continued
In addition to helping to finance
the government at a lower cost, FRNs should also help to expand Treasury’s
investor base and support its debt management goal of extending the average
maturity of Treasury debt.
In the initial auction, Treasury
will offer $15 billion of FRN securities with a two-year maturity date.
Treasury expects to auction additional new FRN securities quarterly in April,
July, and October with two reopenings in the subsequent months of each quarter.
To view today’s auction
announcement, please click HERE.
For more information on FRNs,
please click HERE.