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3/19/2020

QUARTERLY REFUNDING STATEMENT OF ACTING ASSISTANT SECRETARY FOR FINANCIAL MARKETS MONIQUE ROLLINS | U.…

QUARTERLY REFUNDING STATEMENT OF ACTING ASSISTANT
SECRETARY FOR FINANCIAL MARKETS MONIQUE ROLLINS
November 1, 2017

WASHINGTON — The U.S. Department of the Treasury is o ering $62 billion of Treasury
securities to refund approximately $42.7 billion of privately-held Treasury notes maturing on
November 15, 2017. This will raise new cash of approximately $19.3 billion. The securities are:
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A 3-year note in the amount of $24 billion, maturing November 15, 2020;

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A 10-year note in the amount of $23 billion, maturing November 15, 2027; and

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A 30-year bond in the amount of $15 billion, maturing November 15, 2047.

The 3-year note will be auctioned on a yield basis at 1:00 p.m. ET on Tuesday, November 7,
2017. The 10-year note will be auctioned on a yield basis at 1:00 p.m. ET on Wednesday,
November 8, 2017. The 30-year bond will be auctioned on a yield basis at 1:00 p.m. ET on
Thursday, November 9, 2017. All of these auctions will settle on Wednesday, November 15,
2017.
The 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 Securities (TIPS) reopening auction, the December 5-year TIPS reopening
auction, the January 10-year TIPS auction, and the regular monthly 2-year Floating Rate Note
(FRN) auctions.
Projected Financing Needs
Based on current fiscal forecasts, Treasury intends to maintain coupon issuance sizes at current
levels over the upcoming quarter. Treasury plans to address changes in any seasonal borrowing
needs over the next quarter through changes in regular bill auction sizes and/or cash
management bills.
Changes in Borrowing Needs and Treasury's Response
Given the announced changes to the Federal Reserve’s reinvestment policy for its System Open
Market Account (SOMA) portfolio and projections for the fiscal outlook, in addition to increasing
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QUARTERLY REFUNDING STATEMENT OF ACTING ASSISTANT SECRETARY FOR FINANCIAL MARKETS MONIQUE ROLLINS | U.…

bill supply, Treasury anticipates announcing gradual adjustments to its nominal coupon and 2year FRN auction sizes at the February 2018 refunding. The magnitude and allocation of
increases to auction sizes will depend in part on projections for the fiscal outlook, as well as
feedback from market participants.
Based on current fiscal forecasts and internal Treasury modeling, it is anticipated that these
changes will likely result in a stabilization of the weighted average maturity (WAM) of debt
outstanding at or around the current levels, with the caveat that unexpected large changes in
borrowing needs could have an unforeseen impact on future issuance and ultimately the level
of WAM. Any adjustments will be made in a manner consistent with our practice of being regular
and predictable.
Debt Limit
The debt limit is 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. 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.
The “Continuing Appropriations Act, 2018 and Supplemental Appropriations for Disaster Relief
Requirements Act, 2017” suspended the debt limit through December 8, 2017. If Congress fails
to increase or further suspend the debt limit by December 8, Treasury, as it has in the past, can
take certain extraordinary measures to continue to finance the government on a temporary
basis.
Extraordinary measures will allow the government to continue to meet its obligations through
January 2018. It is currently too early to provide a more precise forecast as to how long the
extraordinary measures will last.
Test Buyback Operation
Since 2014, Treasury has conducted periodic testing of existing IT infrastructure to ensure that
buyback functionality remains operational. Within the next quarter, Treasury intends to
conduct another small-value buyback operation to continue testing the buyback infrastructure.
Details of such an operation will be announced at a later date.
This small-value buyback operation should not be viewed by market participants as a precursor
or signal of any pending policy changes regarding Treasury’s use of buybacks.
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QUARTERLY REFUNDING STATEMENT OF ACTING ASSISTANT SECRETARY FOR FINANCIAL MARKETS MONIQUE ROLLINS | U.…

Small-Value Contingency Auction Operation Test
Treasury believes that it is prudent to regularly test its contingency auction infrastructure.
Treasury’s contingency auction system has been used routinely over the last several years to
conduct mock auctions. Within the next quarter, Treasury intends to conduct a small-value test
auction using its contingency auction system. More details about this small-value auction test
will be announced at a later date.
This small-value auction should not be viewed by market participants as a precursor or signal of
any pending policy changes regarding Treasury’s existing auction processes.
Please send comments and suggestions on these subjects or others related to debt
management. The next quarterly refunding announcement will take place on January 31, 2018.
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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102