Treasury revives 7-year note in record refunding
Written on February 6, 2009
The U.S. Treasury on Wednesday said it will reintroduce the 7-year note and increase the frequency of 30-year bond offerings as part of a record debt refunding plan for the current quarter.
The Treasury said it will sell $67 billion worth of 3-year and 10-year notes and 30-year bonds next week, refunding about $36.3 billion of these securities and raising about $30.7 billion of new cash.
The Treasury, faced with marketable borrowing needs as high as $2.5 trillion in fiscal 2009 to cope with a recession, economic stimulus and financial rescue plans, said it has been increasing issuance sizes across all maturities, but needs more firepower.
“Changes in economic conditions, financial markets and fiscal policy, as well as a decline in nonmarketable debt issuance have contributed to an increase in Treasury’s marketable borrowing needs,” the Treasury said in a statement.
It will hold new auctions of the 7-year note starting on February 26, a move that will accelerate 2-year and 5-year debt auctions by one day that week cash advance no credit check.
The Treasury also said it will move to a regular reopening of quarterly 30-year bonds, effectively doubling the number of annual auctions for its longest maturity to eight.
And in May, it will announce whether to institute a second reopening of the 30-year bond to sell it on a monthly basis. The Treasury said it also will consider reintroduction or establishment of other benchmark securities.
But The Treasury said that based on current projections, it expects to reach its $11.315 trillion debt ceiling in the first half of 2009. U.S. national debt on February 2 was $10.605 trillion.
“Given the uncertainty surrounding potential borrowing needs, Treasury will continue to keep Congress and the markets apprised of developments as the debt outstanding approaches the statutory limit,” the Treasury said.
(Reporting by David Lawder; Editing by Theodore d’Afflisio)
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