TALKING POINTS 

FOR THE 

FINANCING PRESS CONFERENCE 

January 29, 1986 

Today we are announcing the terms of our regular February 

quarterly refunding. I will also discuss the Treasury's financing 

requirements for the balance of the current quarter and our 

estimated cash needs for the April-June quarter. 

1. We are offering $23.0 billion of 3- 10- and 30-year domestic 

securities to refund $9.8 billion of publicly-held coupon 

securities maturing on February 15 and raise approximately 

$13.2 billion of new cash. In addition, we are offering 

up to $1.0 billion of foreign targeted securities in 

conjunction with the 10-year domestic issue. 

The three new securities are: 

--First, a 3-year note in the amount of $9.0 billion 

maturing on February 15, 1989. This note will be 

auctioned on a yield basis on Tuesday, February 4. The 

minimum denomination will be $5,000. 

--Second, a 10-year note in the amounts of $7.0 billion 

for the domestic issue and up to $1 billion for the 

foreign targeted companion issue, both maturing on 

February 15, 1996. These notes will be auctioned on a 

yield basis on Wednesday, February 5. The minimum 

denomination will be $1,000. 

--Third, a 30-year bond in the amount of $7.0 billion 

maturing on February 15, 2016. This bond will be 

auctioned on a yield basis on Thursday, February 6. 

The minimum denomination will be $1,000. 
On each of the three domestic issues, we will accept noncompetitive tenders of up to $1,000,000. The size of 

the domestic 10-year issue is the same as the amount 

announced in the November refunding; the 3-year and the 

30-year issues are each $1/4 billion higher than the 

comparable issues in November. 

2. For the current January-March quarter, we estimate a net 

market borrowing of $36.3 billion, assuming a $10 billion 

cash balance at the end of March. 

3. Including this refunding, we will have raised $25.7 billion 

in marketable borrowing. This was accomplished as follows: 

--$6.5 billion of new cash from the 7-year note which settled 

on January 15. 

--$4.8 billion of new cash from the 20-year bond which 

settled on January 15. 

--$1.2 billion of new cash from the 2-year note which settles 

January 31. 

--$2.4 billion of new cash in weekly bills, including the bills 

announced yesterday. 

--$.6 billion of new cash from the 52-week bills which 

settled January 23. 

--$4.0 billion paydown in the cash management bill which 

matured January 23. 

--$13.2 billion of new cash from the February refunding 

domestic issues. 

--up to $1 billion from the 10-year foreign targeted issue. 
The remaining net financing requirement of $10.6 billion 

could be accomplished through sales of regular weekly 

and monthly bills, monthly 2-year notes, a 4-year note 

at the end of March, and a note in early March in the 

5-year maturity range. 

4. Our net market borrowing need in the April-June quarter 

is currently estimated in the range of $30 to $35 billion, 

assuming a $15 billion cash balance at the end of June. 

We may wish to have a somewhat higher cash balance than 

the $15 billion amount we have assumed for June 30, 

depending upon our assessment of cash needs and market 

conditions at the time. 

The 10-year domestic note and the 30-year bond being 

offered today will be eligible for conversion to STRIPS 

(Separate Trading of Registered Interest and Principal of 

Securities) and, accordingly, may be divided into their 

separate Interest and Principal components. 
TALKING POINTS 

FOR THE 

FINANCING PRESS CONFERENCE 

April 30, 1986 

Today we are announcing the terms of our regular May 

quarterly refunding. I will also discuss the Treasury's 

financing requirements for the balance of the current quarter 

and our estimated cash needs for the July-September quarter. 

1. We are offering $27.0 billion of 3- 10- and 30-year securities 

to refund $14.2 billion of publicly-held coupon securities 

maturing on May 15 and raise approximately $12.8 billion 

of new cash. This is somewhat less than the $13.2 billion 

of new cash raised in the February refunding and the $13.0 

billion raised in the November refunding. 

The three new securities are: 

--First, a 3-year note in the amount of $9.0 billion 

maturing on May 15, 1989. This note will be auctioned 

on a yield basis on Tuesday, May 6. The minimum 

denomination will be $5,000. 

--Second, a 10-year note in the amount of $9.0 billion 

maturing on May 15, 1996. This note will be auctioned 

on a yield basis on Wednesday, May 7. The minimum 

denomination will be $1,000. 

--Third, a 30-year bond in the amount of $9.0 billion 

maturing on May 15, 2016. This bond will be auctioned 

on a yield basis on Thursday, May 8. The minimum 

denomination will be $1,000. 
On each of the three issues, we will accept noncompetitive tenders of up to $1,000,000. The size 

of the 3-year issue is the same as the amount 

announced in the February refunding; the 10-year 

and the 30-year issues are each $2 billion higher 

than the comparable issues in February. 

2. For the current April-June quarter, we estimate a net 

market borrowing of $31.4 billion, assuming a $15 

billion cash balance at the end of June. We may wish 

to have a somewhat higher June 30 cash balance, depending 

upon our assessment of cash needs and market conditions 

at the time. 

3. Including this refunding, we will have raised $21.6 billion 

in marketable borrowing. This was accomplished as follows: 

--$6.5 billion of new cash from the 7-year note which 

settled on April 3. 

--$2.1 billion of new cash from the 2-year note which 

settles April 30. 

--$1.4 billion of new cash from the 52-week bills which 

settled April 17. 

--$1.2 billion paydown in weekly bills, including the bills 

announced yesterday. 

--$12.8 billion of new cash from the May refunding issues. 
The 'remaining net financing requirement of $9.8 

billion could be accomplished through sales of 

regular weekly and monthly bills, monthly 2-year 

notes, a 4-year note at the end of June, a note 

in early June in the 5-year maturity range, and 

cash management bills. 

4. Our net market borrowing need in the July-September 

quarter is currently estimated in the range of 

$50 to $55 billion, assuming a $20 billion cash 

balance at the end of September. 

The 10-year note and the 30-year bond being offered today 

will be eligible for conversion to STRIPS (Separate Trading 

of Registered Interest and Principal of Securities) and, 

accordingly, may be divided into their separate Interest 

and Principal components. 

We have also decided to eliminate the regular quarterly 

20-year bond cycle. We announced on March 18 the cancellation 

of the 20-year bond that we normally would have auctioned in late 

March, because Congress had not yet acted to increase the amount 

of Treasury's authority to issue long-term bonds without regard 

to the 4-1/4 percent statutory interest rate ceiling. We stated 

at that time that we wished to preserve our then remaining bond 

authority for the 30-year bond to be offered in the May refunding, 

because the 30-year bond is a more attractive issue in the market 

and thus less costly to the Treasury. Over the past month we have 
-4- 

carefully assessed the market's reaction to the cancellation of 

the March 20-year bond, and we have concluded that it would be 

more cost-effective for the Treasury to issue larger amounts 

of 10- and 30-year securities rather than 20-year issues. 

That decision is reflected in the significant increases in 

the amounts of the 10- and 30-year issues we are announcing 

today. While there will be no 20-year issues in the near 

future, the maturities and timing of our issues over the longer 

run will, of course, depend upon market conditions and our 

total financing needs at the time. 

On another Treasury debt management matter, I would like to 

note that we are considering the need to reduce the guaranteed 

minimum interest rate on new issues of U.S. Savings Bonds. 

The Treasury is pleased with the success of the market-based 

variable rate savings bond we introduced in November 1982. Since 

then Series EE savings bonds have provided a yield equivalent to 

85 percent of the 5-year Treasury marketable rate for savings 

bonds held at least 5 years. Such bonds, like the previous EE 

bonds, have early redemption and tax deferral advantages not 

offered on Treasury marketable securities, and also have a 

guaranteed minimum rate of 7.5 percent if held at least 5 

years. The new savings bond has been well received by savers, 

while at the same time it has been a cost effective means of 

financing a portion of the public debt, as compared to financing 

with marketable securities. Sales of savings bonds have more 

than doubled, from $779 million in the third quarter of 1982 to 

$1.7 billion in the first quarter of 1986. 
Market yields have declined substantially since the 

current terms of the market-based savings bond rate were 

established. The market-based savings bond rates are calculated 

in six-month blocks, and are announced early in May and November 

each year. The first market-based rate announced in November 1982 

was 11.09 percent. The rate for the current 6-month period 

is 8.36 percent, for bonds purchased through today. The rate for 

the May-October period, to be announced later this week, will be 

about 7 percent. Thus, the variable market-based rate, for the 

first time, will be lower than the 5-year floor rate of 7.5 

percent. 

In these circumstances, we are considering a reduction in 

the 7.5 percent floor for future issues of Series EE savings bonds, 

in order to preserve the cost effectiveness of the program and to 

avoid excessive competition with other savings forms. We are not 

considering a change in the market-based formula, and any reduction 

in the 7.5 percent guaranteed minimum rate will apply only to 

bonds sold, or extended in maturity, after the reduction is 

announced. 
TO BE RELEASED AT 4:00 p.m. 

PRESS CONFERENCE 

April 30, 1986 

TREASURY ANNOUNCES ELIMINATION OF 20-YEAR BONDS AND 

CONSIDERATION OF REDUCTION IN SAVINGS BONDS INTEREST RATE FLOOR 

20-year bond 

The Treasury Department announced today that it will eliminate 

the regular quarterly 20-year bond cycle. The Department announced 

on March 18 the cancellation of the 20-year bond that it normally 

would have auctioned in late March, because Congress had not yet 

acted to increase the amount of Treasury's authority to issue longterm bonds without regard to the 4-1/4 percent statutory interest 

rate ceiling. The Department stated at that time that it wished 

to preserve its then remaining bond authority for the 30-year bond 

to be offered in the May refunding, because the 30-year bond is 

a more attractive issue in the market and thus less costly to the 

Treasury. Over the past month Treasury has carefully assessed the 

market's reaction to the cancellation of the March 20-year bond 

and concluded that it would be more cost-effective for the Treasury 

to issue larger amounts of 10- and 30-year securities rather than 

20-year issues. That decision is reflected in the significant 

increases in the amounts of the 10- and 30-year issues announced 

today. While there will be no 20-year issues in the near future, 

the maturities and timing of Treasury issues over the longer run 

will, of course, depend upon market conditions and total financing 

needs at the time. 

Savings Bond rate 

The Treasury also announced that it is considering the need 

to reduce the guaranteed minimum interest rate on new issues of 

u.S. Savings Bonds. 

The Treasury is pleased with the success of the market-based 

variable rate savings bond introduced in November 1982. Since 

then Series EE savings bonds have provided a yield equivalent to 

85 percent of the 5-year Treasury marketable rate for savings bonds 

held at least 5 years. Such bonds, like the previous EE bonds, 

have early redemption and tax deferral advantages not offered on 

Treasury marketable securities, and also have a guaranteed minimum 

rate of 7.5 percent if held at least 5 years. The new savings bond 

has been well received by savers, while at the same time it has 

been a cost effective means of financing a portion of the public 

debt, as compared to financing with marketable securities. Sales 

of savings bonds have more than doubled, from $779 million in the 

third quarter of 1982 to $1.7 billion in the first quarter of 1986. 
Market yields have declined substantially since the 

current terms of the market-based savings bond were established. 

The market-based savings bond rates are calculated in six-month 

blocks, and are announced early in May and November each year. 

The first market-based rate announced in November 1982 was 11.09 

percent. The rate for the current 6-month period is 8.36 percent, 

for bonds purchased through today. The rate for the May-October 

period, to be announced later this week, will be about 7 percent. 

Thus, the variable market-based rate, for the first time, will be 

lower than the 5-year floor rate of 7.5 percent. 

In these circumstances, Treasury is considering a reduction in 

the 7.5 percent floor for future issues of Series EE savings bonds, 

in order to preserve the cost effectiveness of the program and to 

avoid excessive competition with other savings forms. The Department , is,considering a change in the market-based formula, and any 

~'-v~~~k~duction in the7.5 percent guaranteed minimum rate will apply 

'5 4". only to bonds sold, or extended in maturity, after the reduction 

( " W*-- ., is announced. 
TALKING POINTS 

FOR THE 

FINANCING PRESS CONFERENCE 

July 30, 1986 

Today we are announcing the terms of our regular August 

quarterly refunding. I will also discuss the Treasury's 

financing requirements for the balance of the current 

quarter and our estimated cash needs for the October-December 

quarter. 

1. We are offering $28.0 billion securities to refund $14.3 

billion of publicly-held coupon securities maturing on 

August 15 and raise approximately $13.7 billion of new 

cash. 

The three securities are: 

--First, a 3-year note in the amount of $9.5 billion 

maturing on August 15, 1989. This note will be auctioned 

on a yield basis on Tuesday, August 5. The minimum 

denomination will be $5,000. 

--Second, a 9-3/4 year note in the amount of $9.5 billion 

maturing on May 15, 1996. This note will be a reopening 

of the 10-year note issued in May of this year and will 

be auctioned on a yield basis on Wednesday, August 6. 

The minimum denomination will be $1,000. 

--Third, a 29-3/4 year bond in the amount of $9.0 billion 

maturing on May 15, 2016. This bond will be a reopening 

of the 30-year bond issued in May of this year and will 

be auctioned on a yield basis on Thursday, August 7. 

The minimum denomination will be $1,000. 
On each of the three issues, we will accept noncompetitive 

tenders of up to $1,000,000. The sizes of the 3-year 

and 9-3/4 year issues are $1/2 billion higher than the 

amounts announced in the May refunding, and the size of 

the 29-3/4 year issue is the same as the May issue. 

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

market borrowing of $43.5 billion, assuming a $20 billion 

cash balance at the end of September. We may wish to 

have a somewhat higher September 30 cash balance, depending 

upon our assessment of cash needs and market conditions 

at the time. 

3. Including this refunding, we will have raised $27.9 billion 

in marketable borrowing. This was accomplished as follows: 

--$6.8 billion of new cash from the 7-year note which 

settled on July 7. 

--$1.5 billion of new cash from the 2-year note which 

settles July 31. 

--$1.9 billion of new cash from the 52-week bills on 

July 10 and August 7. 

--$4.0 billion of new cash from weekly bills, including 

the bills announced yesterday. 

--$13.7 billion of new cash from the August refunding issues. 
The remaining net financing requirement of $15.6 

billion could be accomplished through sales of 

regular weekly and monthly bills, monthly 2-year 

notes, a 4-year note at the end of September, and 

a note in early September in the 5-year maturity 

range. 

4. Our net market borrowing need in the October-December 

quarter is currently estimated in the range of 

$50 to $55 billion, assuming a $15 billion cash 

balance at the end of December. We may wish to 

have a somewhat higher December 31 cash balance, 

depending upon our assessment of cash needs and 

market conditions at the time. 

The 9-3/4 year note and the 29-3/4 year bond announced today 

will be eligible for conversion to STRIPS (Separate Trading 

of Registered Interest and Principal of Securities) and, 

accordingly, may be divided into their separate Interest and 

Principal components. 

Our current cash and debt projections indicate that there 

will be adequate room under the debt ceiling to accommodate 

the August 15 issues announced today, though we may need to 

reduce the size of the weekly bill issues settling on August 14. 

Revenues have been higher and outlays lower than agency 

estimates provided to Treasury as recently as July 15. Therefore, it now appears likely that we will be able to avoid a 

default through September 1 provided we use borrowing authority 

available to the Federal Financing Bank. 
-4- 

However, because we will be at the statutory debt limit, 

Treasury will be unable to invest the Social Security normalized 

tax transfer on September 2 and there is also some possibility 

that the Treasury will run out of cash that day. It will not be 

possible to pay Social Security benefits on September 3 without 

taking actions that could adversely affect the Social Security 

trust funds. To pay benefits, we would probably have to do redemptions earlier than normal and we would have to redeem longterm securities held by the trust funds that would ordinarily 

not have been redeemed in September. 

Even though these actions would be taken exclusively to pay 

benefits, they would result in lost earnings to the trust funds. 

Congress will not return from its August recess until after 

September 3. Therefore, to avoid these losses and their adverse 

psychological effect on Social Security recipients, and because 

Treasury cannot assure that there will be sufficient cash on 

September 2, we strongly urge Congress to increase the debt 

limit prior to the August recess. 

On another Treasury debt management matter, I would like to 

repeat our statement at the April 30 press conference that 

we are considering the need to reduce the 7.5 percent guaranteed 

minimum interest rate on new issues of U.S. Savings Bonds, in order 

to preserve the cost effectiveness of the program and to 

avoid excessive competition with other savings forms. 
The Treasury is pleased with the continued success of the 

market-based variable rate savings bond we introduced in 

November 1982. The new savings bond has been well received 

by savers, while at the same time it has been a cost effective 

means of financing a portion of the public debt, as compared 

to financing with marketable securities. Sales of savings 

bonds have increased sharply, from $779 million in the third 

quarter of 1982 to $2,230 million in the second quarter of 1986. 

We are not considering a change in the market-based formula, 

and any reduction in the 7.5 percent guaranteed minimum rate 

will apply only to bonds sold, or extended in maturity, 

after the reduction is announced. 

We are also making a change in the timing of our note 

auctions in the third month of each quarter. As indicated in 

the tentative schedule we distributed today, we are combining 

the 2-year, 4-year and 7-year note auctions in the fourth 

week of September, rather than continuing the past practice 

of auctioning the 2-year note about a week earlier. This 

change is possible since we are no longer selling 20-year 

bonds in that week. Combining the three note auctions in 

one week will help focus the market on the end-of-quarter 

financing and will reduce the lengthy period between the 

auction and issue dates for the 2-year note. 
I am pleased to announce that the Treasury has implemented 

its new automated Treasury Direct Book-Entry Securities System. 

The three securities announced today will be the first securities 

to be issued in TREASURY DIRECT. Beginning with these offerings, 

no engraved securities will be issued for new marketable 

note and bond offerings. Implementation of TREASURY DIRECT 

fulfills the Department's goal of issuing all of its marketable 

securities exclusively in book-entry form, and will save the 

Treasury approximately $46 million over a 7 year period. 

The TREASURY DIRECT system will provide payments that are 

automatically credited on the due date to investors' designated 

checking or savings accounts, thus eliminating delays and 

potential loss of mailed checks. Treasury bills, which are 

already offered exclusively in book-entry form are scheduled 

to have new issues phased into the TREASURY DIRECT system in 

1987. 

The Treasury is also planning to make available a facility 

for the conversion of physically stripped bearer securities 

into a book-entry form at the Federal Reserve Bank of New York. 

This will reduce the current costs and risks to the market 

in holding these physical coupons and will improve the liquidity 

and efficiency of the market. This facility is expected to be 

available in January 1987. Additional information will be 

provided in the near future. This new facility will be maintained 

separately from the Treasury STRIPS program. 
Finally, under the STRIPS program, the Treasury's earlier 

announced plans to provide for reconstitution of STRIPS are 

now at a stage where we expect to make this option available 

early in the Spring of 1987. 
TALKING POINTS 

FOR THE 

FINANCING PRESS CONFERENCE 

October 29, 1986 

Today we are announcing the terms of our regular November 

quarterly refunding. I will also discuss the Treasury's 

financing requirements for the balance of the current 

quarter and our estimated cash needs for the January-March 

quarter. 

1. We are offering $29.0 billion of securities to refund $13.4 

billion of publicly-held coupon securities maturing on 

November 15 and to raise approximately $15.6 billion of 

new cash. 

The three securities are: 

--First, a 3-year note in the amount of $10.0 billion 

maturing on November 15, 1989. This note will be 

auctioned on a yield basis on Tuesday, November 4. 

The minimum denomination will be $5,000. 

--Second, a 10-year note in the amount of $9.75 billion 

maturing on November 15, 1996. This note will be 

auctioned on a yield basis on Wednesday, November 5. 

The minimum denomination will be $1,000. 

--Third, a 30-year bond in the amount of $9.25 billion 

maturing November 15, 2016. This bond will be 

auctioned on a yield basis on Thursday, November 6. 

The minimum denomination will be $1,000. 
On each of the three issues, we will accept noncompetitive 

tenders of up to $1,000,000. The size of the 3-year issue 

is $1/2 billion higher than the amount announced in the 

August refunding, and the sizes of the 10-year note and 

30-year bond are $1/4 billion higher than the amounts 

announced in the August refunding. 

2. For the current October-December quarter, we estimate a 

net market borrowing of $57.3 billion, assuming a $15 

billion cash balance at the end of December. We may wish 

to have a somewhat higher December 31 cash balance, depending 

upon our assessment of cash needs and market conditions 

at the time. 

3. Including this refunding, we will have raised $30.8 billion 

in marketable borrowing. This was accomplished as follows: 

--$7.0 billion of new cash from the 7-year note which will 

settle on November 3. 

--$1.7 billion of new cash from the 2-year note which 

settles on October 31. 

--$3.1 billion of new cash from the 52-week bills including 

the bill settling on October 30. 

--$4.0 billion of new cash from the cash management bill 

settling on November 4. 

--$.6 billion paydown in weekly bills including the bills 

announced yesterday. 

--$15.6 billion of new cash from the November refunding issues. 
The remaining net financing requirement of $26.5 

billion could be accomplished through sales of 

regular weekly and monthly bills, monthly 2-year 

notes, a 4-year note at the end of December, a note 

in early December in the 5-year maturity range and 

a cash management bill. 

4. Our net market borrowing need in the January-March 

quarter is currently estimated in the range of 

$40-$45 billion, assuming a $10 billion cash balance 

at the end of March. We may wish to have a somewhat 

higher March 31 cash balance, depending upon our 

assessment of cash needs and market conditions at 

the time. 

The 10-year note and the 30-year bond announced today 

will be eligible for conversion to STRIPS (Separate Trading 

of Registered Interest and Principal of Securities) and, 

accordingly, may be divided into their separate interest 

and principal components.