Title: US Treasury to Raise Billions in Refunding Offer for Maturing Securities
In an effort to address its borrowing needs and refund privately-held Treasury notes and bonds maturing on August 15, 2023, the US Department of the Treasury has announced a significant offering of Treasury securities worth $103 billion. The issuance aims to raise approximately $19 billion in new cash from private investors.
The securities on offer include a 3-year note, a 10-year note, and a 30-year bond, with respective amounts of $42 billion, $38 billion, and $23 billion. The auctions for these securities are scheduled to take place on August 8, 9, and 10, 2023, with settlement set for August 15, 2023.
To better align with future borrowing needs and the fiscal outlook, the Treasury plans to gradually increase auction sizes. Starting in October 2023, auction sizes for the 2- and 5-year notes will grow by $3 billion per month, the 3-year note by $2 billion per month, and the 7-year note by $1 billion per month. In addition, the auction sizes for the 10-year note, 30-year bond, and 20-year bond will increase by $3 billion, $2 billion, and $1 billion respectively.
Incremental increases will also be implemented for TIPS (Treasury Inflation-Protected Securities) auction sizes, commencing with the October 5-year new issue.
To meet its borrowing needs in the coming quarter, the Treasury will continue to issue bills and cash management bills. Furthermore, the department is planning a regular buyback program to be implemented in 2024, with further updates to be provided at a later date.
In an effort to ensure a resilient auction system, the Treasury will conduct a small-value test auction using its contingency auction system within the next three months.
With this refunding offering, the US Treasury aims to efficiently manage its debt obligations while attracting private investors looking for secure and reliable investment opportunities amidst the uncertainties in the financial market.
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