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US: Treasury Refunding Announcement
Highlights
The US Treasury offers $125 billion of Treasury debt to refund $83.3 billion of privately-held Treasury notes maturing on May 15, 2026. The refunding issuance will raise new cash from private investors of $41.7 billion.
The securities are:
- A 3-year note of $58 billion, maturing May 15, 2029;
- A 10-year note of $42 billion, maturing May 15, 2036;
- A 30-year bond of $25 billion, maturing May 15, 2056.
Treasury said it expects its existing offering sizes to allow it to address potential changes to the fiscal outlook and to the size and composition of the SOMA portfolio.
Here is its statement on the outlook:"Based on current projected borrowing needs, Treasury anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters. Treasury is monitoring SOMA purchases of Treasury bills and growing demand for Treasury bills from the private sector. Looking ahead, Treasury continues to evaluate potential future increases to nominal coupon and FRN auction sizes, with a focus on trends in structural demand and potential costs and risks of various issuance profiles."
Definition
Each quarter the U.S. Treasury announces its funding needs for the next two quarters. The announcement includes which securities will be offered and the dates of their announcement, auction and settlement.
Description
Bond market players pay attention to this release so that they know the degree of looming supply of Treasuries coming onto the market so that they can evaluate what appropriate yields might be for trading. Heavy supply coming onto the market suggests higher yields.