Earlier today, the Treasury announced the details of its February
refunding operation.
The operation will consist of auctions next week of three new note issues
-- three-, five- and 10-year maturities -- totaling $56 billion. These
issues will refund roughly $26.6 billion of publically held debt maturing on 2/15,
and raise about $29.4 billion of new cash.
In addition to the public holdings, Federal Reserve banks hold $4.2
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 February 2003 financing involved the
issuance of $42.0 billion in notes. That operation refunded $21.6 billion of
maturing issues, while raising $20.4 billion in new cash.
------------------------------------------------
FEBRUARY 2004 TREASURY REFUNDING OPERATION*
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Auction Amount 02/04 When-
Date (Bils.) Maturity Coupon Issued Yield
------------------------------------------------
02/10 $24.0 02/15/07 @ NA#
02/11 $16.0 02/15/09 @ NA#
02/12 $16.0 02/15/14 @ NA#
----
$56.0
====
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*To refund $26.61 billion in maturing
issues and raise $29.39 billion in new
cash. @Coupon to be established through
auction process. #At 12:00 PM (ET) on 2/4,
the existing 3-year, 5-year and 10-year is-
sues (2.625s of 11/15/06, 3.250s of 1/15/09
and 4.250s of 11/15/13) were trading at re-
spective yields of 2.19%, 3.12% and 4.13%.
------------------------------------------------
ISM Non-Manufacturing Index
Earlier today, the Institute for Supply Management released its index
covering the economy's non-manufacturing activity. Results were for January, and
the index came in at a reading of 65.7. This compared with December results
of 58.0, and was somewhat better than the consensus estimate.
However, as was the case with ISM's manufacturing index (released on
Monday), today's number received a large boost from seasonal adjustment. I'll
have more on this in a later update.
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