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US: Treasury Refunding Announcement
Highlights
The U.S. Treasury announces it will offer $125 billion of Treasury securities to refund approximately $96.3 billion of privately-held Treasury notes and bonds maturing on Aug. 15, 2026.
The Treasury said it will keep auction sizes for coupons and FRNs where they are for the next few quarters at least, which is interesting, given how spooked markets have been about rising supply. There is no promise made about holding off on raising the size of bill offerings, which has been happening lately. Investors generally expect the Treasury to start raising its coupon offering sized in 2027.
The August refunding issuance will raise new cash from private investors of $28.7 billion. The securities are:
- A 3-year note of $58 billion, maturing August 15, 2029;
- A 10-year note of $42 billion, maturing August 15, 2036;
- A 30-year bond of $25 billion, maturing August 15, 2056.
Below is what Treasury said about the outlook for offering sizes, a repeat of its standard language:
"Treasury believes its current auction sizes leave it well positioned to address potential changes to the fiscal outlook and to the size and composition of the SOMA portfolio. 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 changes to nominal coupon and FRN auction sizes, with a focus on trends in structural demand and potential costs and risks of various issuance profiles.