TALKING POINTS 

FOR THE 

FINANCING PRESS CONFERENCE 

August 1, 1990 

Today we are announcing the terms of our regular August 

quarterly refunding. However, since Congress has not completed 

action on legislation to increase the debt ceiling, I am only 

able to announce a tentative schedule of the auctions and 

settlement of the refunding issues. We will announce the final 

auction schedule as soon as there is assurance of enactment of 

legislation to raise the statutory debt limit. We are hopeful 

that an increase in the debt ceiling will be enacted in a timely 

manner. 

I will also discuss the Treasury's financing requirements 

for the balance of the current calendar quarter and our estimated 

cash needs for the October-December 1990 quarter. 

1. We are offering $32.25 billion of notes and bonds to 

refund $20.0 billion of privately-held notes maturing on August 

15 and to raise approximately $12.25 billion of cash. The three 

securities are: 

-- First, a 3-year note in the amount of $11.50 billion 

maturing on August 15, 1993. This note is scheduled to 

be auctioned on a yield basis on Tuesday, August 7. The 

minimum denomination will be $5,000. 
-- Second, a 10-year note in the amount of $10.50 billion 

maturing on August 15, 2000. This note is scheduled to 

be auctioned on a yield basis on Wednesday, August 8. 

The minimum denomination will be $1,000. 

-- Third, a 30-year bond maturing August 15, 2020 in the 

amount of $10.25 billion. This bond is scheduled to be 

auctioned on a yield basis on Thursday, August 9. The 

minimum denomination will be $1,000. 

We will accept noncompetitive tenders up to $1,000,000 for each 

of these issues. 

2. We are also offering $10 billion of 36-day cash 

management bills maturing September 20, 1990. The cash management 

bills are scheduled to be auctioned on a discount basis on 

Thursday, August 9, at 12:00 noon for settlement Wednesday, 

August 15. The minimum denomination will be $1,000,000. 

Noncompetitive tenders will not be accepted. 

3. It will be necessary to change the auction schedule, if 

the Treasury does not have assurance of final action on the debt 

limit by August 6. August 13 is the last day on which final 

Congressional action could occur in time for the Treasury to ,.,, ,/ 

auction securities on August 14 and settle them on August 15. If 

Congress does wait until August 13 to act, Treasury's financing 
options will be limited and costly. 

4. For the current July-September quarter, we estimate a 

net market borrowing need of $63.5 billion, which includes 

Treasury borrowing to finance Federal Financing Bank lending to 

the Resolution Trust Corporation, and assumes a $30 billion cash 

balance at the end of September. We may want to have a higher 

balance, depending upon our assessment of cash needs at the time. 

Including this refunding, we will have raised $40.1 billion 

of the $63.5 billion in net market borrowing needed this JulySeptember quarter. This net borrowing was accomplished as 

follows: 

-- $3.4 billion of cash from the 2- and 4-year notes which 

settled July 2; 

-- $3.4 billion of cash from the 7-year note that settled 

July 16; 

-- $2.9 billion of cash from the 2-year note which settled 

July 31; 

-- $15.0 billion of cash in regular weekly bills, including 

the bills announced yesterday; 

-- $3.1 billion of cash in 52-week bills; and 

-- $12.25 billion of cash from the refunding issues 

announced today. 

The $23.4 billion to be raised in the rest of the July-September 
4 

quarter could be accomplished through sales of regular 13-, 26-, 

and 52-week bills, a 2-year note in August and a 5-year 2-month 

note in early September. Additional cash management bills may be 

necessary to cover the low point in the cash balance in early 

September. 

The $4 billion cash management bills announced yesterday and 

the $10 billion cash management bills announced today mature 

September 20. Since these bills will be issued and mature within 

the July-September quarter they do not affect the net market 

borrowing total. 

5. We estimate Treasury net market borrowing needs to be 

in the range of $65 to $70 billion for the October-December 

quarter, assuming a $30 billion cash balance on December 31. The 

Treasury's October-December borrowing estimate does not include 

any allowance for FFB lending to the RTC. Treasury plans to 

update its market borrowing estimate for the October-December 

quarter as soon as the Oversight Board has reviewed and approved 

the RTC8s working capital budget for that period. 

6. We anticipate that the next auction of REFCORP bonds 

will be announced on October 2, for auction October 9, and 

settlement October 16. 
7. The 10-year notes and 30-year bonds announced today 

will be eligible for conversion to STRIPS (Separate Trading of 

Registered Interest and Principal of Securities) and, 

accordingly, may be divided into separate interest and principal 

components.