A report on the amount of net stripping of Treasury securities that has taken place during the month. The report details gross stripping and reconstitution of Treasury notes and bonds by individual issue.
STRIPS is an acronym for Separate Trading of Registered Interest and Principal of Securities. A normal Treasury note or bond consists of a principal payment and semiannual interest payments. For example, a 30-year Treasury bond for $1,000 consists of 60 interest payments--one every six months for 30 years--and a principal payment of $1,000 when the bond matures. If this bond gets stripped of its interest (coupon) payments, it becomes a "zero-coupon" bond. The owner doesn't get paid any interest but buys the right to repayment of principal, $1,000, at a deep discount to the face value. Investors buy these to guarantee a certain payment amount at a specific point in the future (e.g. when a child will be ready for college), but don't want income from the bonds over that period.