Summary
Earlier today, the Treasury announced the outline of its November refunding operation. Next week, Treasury will conduct three auctions totaling $51.0 billion. These will refund $48.0 billion in maturing debt, and raise $3.0 in new cash.
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The Treasury's November refunding operation will consist of auctions next week of three new note issues -- three-, five- and 10-year maturities -- totaling $51.0 billion. These issues will refund roughly $48.01 billion of publically held debt maturing on 11/15, and raise about $2.99 billion of new cash.
(NOTE: The Treasury hit its congressionally legislated debt ceiling, currently standing at $7.384 trillion, during October. However, through the use of certain "accounting measures," it is still able to sell debt to finance its operations.)
In addition to the public holdings, Federal Reserve banks hold $11.52 billion of maturing issues for their own accounts. The Treasury may refund these through the sale of additional amounts of the new securities.
By comparison, the Treasury's November 2003 financing involved the issuance of $57.0 billion in notes. That operation refunded approximately $24.8 billion of maturing issues, while raising about $32.2 billion in new cash.
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NOVEMBER 2004 TREASURY REFUNDING OPERATION*
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Auction Amount 11/03 When-
Date (Bils.) Maturity Coupon Issued Yield
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11/08 $22.0 11/15/07 @ NA#
11/09 $15.0 11/15/09 @ NA#
11/10 $14.0 11/15/14 @ NA#
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$51.0
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*To refund $48.01 billion in maturing issues
and raise $2.99 billion in new cash. @Coupon
to be established through auction process.
#At 1:30 PM (ET) on 11/3, the current on-the-
run 3-year, 5-year and 10-year issues (2.750s
of 8/15/07, 3.375s of 10/15/09 and 4.250s of
8/15/14) were trading at respective yields of
2.83%, 3.36 and 4.11%.
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