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3/19/2020

Quarterly Refunding Statement of Deputy Assistant Secretary for Capital Markets Clay Berry | U.S. Department of the Treasury

Quarterly Refunding Statement of Deputy Assistant Secretary for
Capital Markets Clay Berry
January 31, 2018

WASHINGTON — The U.S. Department of the Treasury is o ering $66 billion of Treasury
securities to refund approximately $46.6 billion of privately-held Treasury notes maturing on
February 15, 2018. This issuance will raise new cash of approximately $19.4 billion. The
securities are:
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A 3-year note in the amount of $26 billion, maturing February 15, 2021;

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A 10-year note in the amount of $24 billion, maturing February 15, 2028; and

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A 30-year bond in the amount of $16 billion, maturing February 15, 2048.

The 3-year note will be auctioned on a yield basis at 1:00 p.m. ET on Tuesday, February 6, 2018.
The 10-year note will be auctioned on a yield basis at 1:00 p.m. ET on Wednesday, February 7,
2018. The 30-year bond will be auctioned on a yield basis at 1:00 p.m. ET on Thursday, February
8, 2018. All of these auctions will settle on Thursday, February 15, 2018.
The balance of Treasury financing requirements will be met with the weekly bill auctions, cash
management bills, the monthly note and bond auctions, the February 30-year Treasury
Inflation-Protected Securities (TIPS) auction, the March 10-year TIPS reopening auction, the
April 5-year TIPS auction, and the regular monthly 2-year Floating Rate Note (FRN) auctions.
Projected Financing Needs: Increase in Coupon Sizes
In November 2017, Treasury announced its intention to adjust auction sizes in order to respond
to increased borrowing needs resulting from the change to the Federal Reserve’s reinvestment
policy for its System Open Market Account (SOMA) portfolio as well as the fiscal outlook. As
such, Treasury is announcing modest increases to nominal coupon and 2-year FRN auction sizes
beginning in February. Additional seasonal borrowing needs will be addressed through changes
in regular bill and/or cash management bill auction sizes.
Over the next quarter, Treasury anticipates increasing the sizes of the 2- and 3-year note
auctions by $2 billion per month. As a result, the size of 2- and 3-year note auctions will increase
by $6 billion by the end of the quarter. In addition, Treasury will increase the auction size of the
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Quarterly Refunding Statement of Deputy Assistant Secretary for Capital Markets Clay Berry | U.S. Department of the Treasury

next 2-year FRN auction by $2 billion in February. Finally, Treasury will increase auction sizes by
$1 billion to each of the next 5-, 7-, and 10-year notes and the 30-year bond auctions starting in
February. All changes are applicable to subsequent new issues and reopenings. In total, these
adjustments will result in an additional $42 billion of new issuance for the upcoming quarter.
Auction sizes for TIPS will remain unchanged over the next quarter. TIPS continue to be an
important product in Treasury’s debt issuance portfolio, and Treasury is fully committed to the
TIPS program.
As stated at the November quarterly refunding, Treasury anticipates these changes will stabilize
the weighted-average maturity (WAM) of the debt outstanding at or around current levels,
notwithstanding large, unexpected changes to borrowing needs.
Treasury will assess the need to make further adjustments to auction sizes at the next Quarterly
Refunding in May based on projections of the fiscal outlook.
Outreach for Treasury Transactions Data
Since July 2017, member firms of the Financial Industry Regulatory Authority (FINRA) have
reported transactions in Treasury securities through the Trade Reporting and Compliance
Engine (TRACE). FINRA has been sharing this data with o icial sector institutions, including
Treasury.
Treasury recognizes the importance of public transparency and the potential value of making
certain data broadly available. As such, Treasury is actively considering a policy on the public
dissemination of Treasury securities transaction data. In developing a policy on public
dissemination, Treasury is taking a data-driven approach to assess forms of dissemination that
would both support market transparency and would do no harm to market functioning and
liquidity.
Treasury o icials are currently seeking input from a wide range of market participants and other
stakeholders through an extensive outreach e ort. Any decision on a policy for the public
dissemination of Treasury securities transaction data will take into consideration stakeholder
feedback.
Debt Limit
The “Continuing Appropriations Act, 2018 and Supplemental Appropriations for Disaster Relief
Requirements Act, 2017” suspended the debt limit through December 8, 2017. Since that time,
Treasury has been at the debt limit and has been taking extraordinary measures to finance the
government on a temporary basis. Based upon available information, Treasury expects to be
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Quarterly Refunding Statement of Deputy Assistant Secretary for Capital Markets Clay Berry | U.S. Department of the Treasury

able to fund the government through the end of February. Treasury urges Congress to act
promptly on this important matter.
Large Position Report (LPR) Call
Sometime over the next three months, Treasury intends to issue an LPR call. On December 10,
2014, Treasury published a final rule amending its large position reporting rules to improve the
information reported so that Treasury can better understand supply and demand dynamics in
certain Treasury securities. The rule became e ective on March 10, 2015. Treasury last
conducted an LPR call on June 1, 2016. Further information regarding Large Position Reports,
including supplementary guidance, can be found at
https://www.treasurydirect.gov/instit/statreg/gsareg/gsareg.htm.

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