Treasury To Issue $72 Billion In Securities Next Week
02/01/2012 | 09:36am
WASHINGTON -- The U.S. Treasury Department Wednesday said it would issue $72 billion in securities next week as it looks to fund the government's mounting debt.
The regular quarterly auction held steady the amount of long-term debt issued by the Treasury at the last refunding. Treasury said it will sell $32 billion in three-year notes on Feb. 7, $24 billion in 10-year notes on Feb. 8, and $16 billion in 30-year bonds on Feb. 9.
All of the auctions will settle on Feb. 15. The CUSIP number on the three-year is 912828SE1. The CUSIP number on the 10-year is 912828SF8. The CUSIP number on the 30-year is 912810QU5. The three-year notes mature Feb. 15, 2015. The 10-year matures Feb. 15, 2022. The 30-year matures Feb. 15, 2042.
During the current quarter, Treasury will meet the balance of its financing requirements with regular weekly bill auctions, monthly note and bond auctions, and Treasury inflation-protected securities, or TIPS, auctions.
Treasury said it expects to continue to gradually increase gross issuance of TIPS in 2012. Most of the increase is likely in five-year and 10-year TIPS, it said.
In coming weeks, there will be a seasonal increase in borrowing needs ahead of the April tax season, and Treasury says it will address that through increases in regular bill auction sizes and cash management bills.
Treasury said it expects to hold offering sizes for notes and bonds stable over the near term.
It continues to extend the average maturity of Treasury debt. The average maturity of all of the Treasury's debt has increased from less than 50 months in 2008 to 62.4 months as of Dec. 30, part of a strategy by the Treasury to lock in long-term interest rates while they are low. There has been talk of pushing that average even higher, perhaps up to 70 months.
On Wednesday, Treasury said next week's auctions of long-term debt will refund $49.6 billion of maturing securities and raise $22.4 billion of new cash, Treasury said.
Earlier in the week, Treasury estimated it expects to borrow $444 billion this quarter and $200 billion April through June.
Treasury has been borrowing heavily as the U.S. runs a budget deficit that has exceeded $1 trillion three years in a row.
The non-partisan Congressional Budget Office Tuesday forecast a federal budget deficit of $1.1 trillion in fiscal year 2012 as the U.S. economy continues to grow at a "sluggish pace."
Treasury sells bills, notes, and bonds to finance government operations and pay off debt. Every quarter, it holds a refunding, a replacement of government debt, often debt that is about to mature, with new debt.
-By Jeffrey Sparshott, Dow Jones Newswires; 202-862-9291; jeffrey.sparshott@dowjones.com
02-01-12 0904ET
Copyright (c) 2012 Dow Jones & Company, Inc.
