NEW YORK – The Treasury department announced today it will sell $40 billion three-year notes at 1 p.m., EST, on Tuesday, February 9, $25 billion 10-year notes at 1 p.m., EST, on Wednesday, February 10, and $16 billion 30-year bonds at 1 p.m., EST, on Thursday, February 11.
Treasury is refunding approximately $48.3 billion of privately held securities maturing on February 15. This will raise approximately $32.7 billion.
The balance of Treasury financing requirements will be met with 4-, 13-, and 26-week bills; 52-week bills; monthly 2-year, 3-year, 5-year, and 7-year notes; the February 30-year TIPS; the March and April 10-year note reopenings and 30-year bond reopenings; the April 5-year TIPS; and the April 10-year TIPS reopening, Treasury said.
Treasury expects to issue cash management bills, some potentially longer dated, during the quarter.
“Treasury believes that auction sizes are at levels that give us the ability to adequately address a broad range of potential financing needs, while allowing the average maturity of debt to gradually extend,” Treasury said in a statement. “As such, Treasury anticipates that nominal coupon auction sizes will stabilize at current levels. Going forward, we will continue to monitor projected financing needs and make adjustments, as necessary.”
Treasury noted that the decision on nominal coupon issuance does not include Treasury Inflation-Indexed Securities (TIPS), which will gradually increase. In fact, Treasury said it may increase the frequency of TIPs auctions. “This could include, but is not limited to, the addition of a second reopening to 10-year TIPS offerings. Such an action would result in a total of six 10-year TIPS auctions per year,” Treasury said.
Any change would begin in July, with reopening auctions in September and November, and will be announced at the May 2010 quarterly refunding.
Treasury noted that the debt limit could be reached by the end of February, and it is working with Congress to increase the debt ceiling.
The Treasury Supplemental Financing Program (SFP) account declined from $15 billion to $5 billion, by late December, Treasury said. “The action was taken to preserve flexibility in the conduct of debt management policy,” the statement said.
