TALKING POINTS 

FOR THE 

FINANCING PRESS CONFERENCE 

August 3, 1994 

Today, we are announcing the terms of the regular Treasury 

August midquarter refunding. I will also discuss Treasury 

financing requirements for the balance of the current calendar 

quarter and our estimated cash needs for the October-December 

1994 quarter. 

1. We are offering $40.0 billion of notes and bonds to 

refund $29.6 billion of privately held notes and bonds maturing 

on August 15 and to raise approximately $10.4 billion of cash. 

The three securities are: 

-- First, a 3-year note in the amount of $17.0 billion, 

maturing on August 15, 1997. This note is scheduled to 

be auctioned on a yield basis at 1:00 p.m. Eastern time 

on Tuesday, August 9, 1994. The minimum purchase 

amount will be $5,000 and purchases above $5,000 may be 

made in multiples of $1,000. 

-- Second, a 10-year note in the amount of $12.0 billion, 

maturing on August 15, 2004. This note is scheduled to 

be auctioned on a yield basis at 1:00 p.m. Eastern time 

on Wednesday, August 10. The minimum purchase amount 

will be $1,000. 
-- Third, a 30 114-year bond in the amount of $11.0 

billion, maturing on November 15, 2024. This bond is 

scheduled to be auctioned on a yield basis at 1:00 p.m. 

Eastern time on Thursday, August 11. The minimum 

purchase amount will be $1,000. 

2. We are also announcing a $7 billion 38-day cash 

management bill, which will be issued on August 15 and mature on 

September 22, 1994. This bill is scheduled to be auctioned on a 

discount rate basis at 11:30 a.m. Eastern time on Thursday, 

August 11. Noncompetitive tenders will be accepted up to $1 

million and, in order to be timely, must be submitted by 11:OO 

a.m. Eastern time. The minimum purchase amount will be $10,000 

and purchases above $10,000 may be in multiples of $1,000. 

3. As announced on Monday, August 1, 1994, we estimate a 

net market borrowing need of $45 billion for the July-September 

1994 quarter. The estimate assumes a $40 billion cash balance at 

the end of September. Including the notes and the bond in this 

refunding, we have raised $19.6 billion of cash from the sale of 

marketable securities. This was accomplished as follows: 

-- raised $3.2 billion from the 2-year note that settled 

August 1; 

-- raised $11.5 billion from the 5-year note that settled 

August 1; 
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raised $1.7 billion from the 52-week bills; 

raised no new cash in the regular weekly bills, 

including those announced yesterday, August 2; 

paid down $7.2 billion in the 7-year note that 

matured July 15; and 

raised $10.4 billion of cash from the securities 

announced for the refunding today. 

The Treasury will need to raise $25.5 billion in market 

borrowing during the rest of the July-September quarter. We have 

taken into account the fact that both the $7 billion cash 

management bill to be issued on August 15 and the $6 billion cash 

management bill that was issued on July 15 will mature on 

September 22, before the end of the quarter. The financing 

remaining to be done before the end of September can be 

accomplished through regular sales of 13-, 26-, and 52-week 

bills and 2-year and 5-year notes, although a cash management 

bill may be necessary to cover the cash low-point in midSeptember. 

5. We estimate Treasury net market borrowing needs to be 

in the range of $45 to $50 billion for the October-December 1994 

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

6. We are also announcing that we intend to establish 3- 

decimal competitive yield bidding for auctions of Treasury notes 
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and bonds, possibly beginning in the spring of 1995. We believe 

that 3-decimal bidding will tend to encourage participation in 

Treasury auctions and will conform Treasury auctions to current 

market practice for when-issued trading of Treasury securities. 

7. We are also announcing that the Treasury will continue 

to auction regular monthly offerings of 2- and 5-year notes using 

the single-price method. 

Treasury's use of the single-price auction method began with 

the 2- and 5-year note auctions in September 1992. The stated 

purpose of the experiment was to determine whether the uniformprice auction technique broadens participation and reduces 

concentration of securities on original issue, and whether it 

reduces the Treasury's financing costs, by encouraging more 

aggressive bidding by participants. 

The results of the single-price auction technique to date 

have been neutral to slightly positive. Certain information 

concerning the results of the auction technique are included in 

the package summarizing the Borrowing Advisory Committee meeting, 

which you can pick up as you leave. 

Until recently, market conditions had been very stable with 

a prolonged period when interest rates were declining to flat. 

We want to continue to examine evidence on the single-price 
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technique over more varied interest rate environments. We expect 

to release more information in the future for review by market 

participants and other interested parties. 

8. We will accept noncompetitive tenders up to $5 million 

for each of the notes and the bonds. The 10-year note and the 

30 114-year bond being announced today are 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. 

9. The November midquarter refunding press conference will 

be held Wednesday, November 2, 1994.