OFFICE OF PUBLIC AFFAIRS 1500 PENNSYLVANIA AVENUE, N.W. • WASHINGTON, D.C. • 20220 • (202) 622-2960 

FOR IMMEDIATE RELEASE Contact: Jon Murchinson 

July 31, 1996 

REMARKS BY DARCY BRADBURY ASSISTANT 

SECRETARY FOR FINANCIAL MARKETS 

AUGUST 1996 TREASURY QUARTERLY 

REFUNDING PRESS CONFERENCE 

Good afternoon. I will begin with today's refunding announcement and the terms 

of the regular Treasury August midquarter refunding. 1 will also discuss Treasury 

financing requirements for the balance of the current calendar quarter and our estimated 

cash needs for the October-December quarter.

1. We are offering $39.0 billion of notes and bonds to refund $17.6 billion 

of privately held notes maturing on August 15 and to raise approximately $21.4 billion 

of cash.

The three securities are: 

--First, a 3-year note in the amount of $19.0 billion, maturing on August 15, 1999. This 

note is scheduled to be auctioned on a _yield basis at 1:00 p.m. Eastern time on August 

6.

--Second, a 9 year 11 month note in the amount of $10. 0 billion, maturing on July 

15, 2006.This is a reopening of the ten-year note originally issued in July. This 

note is scheduled to be auctioned on a yield basis at 1:00 p.m. Eastern time on 

Wednesday, August 7.

--Third, a 30 year bond in the amount of $10. 0 billion, maturing on August 15, 

2026. This bond is scheduled to be auctioned on a yield basis at 1:00 p.m. 

Eastern time on Thursday, August 8.

2. On April 11, Treasury announced that on August 15 it would call the 8% 

bond of 1996-2001. This bond, of whic h approximately $.7 billion is privately held, will 

be repaid from available funds. We estimated in April that the Treasury is saving about 

$55 - $65 million in budget outlays from this call.

 3. As announced on Monday, July 29, we estimate a net market borrowing need 

of $45.0 billion for the July-September quarter. The estimate assumes a $40 billion cash 

balance at the end of September. Including the securities in this refunding, we have raised 

$48.1 billion of cash from sales of marketable securities. See the attachment for details. 
4. The Treasury will need to paydown $3.1 billion in market borrowing during 

the rest of the July-September quarter. This financing can be accomplished through regular 

sales of 13-, 26-, and 52-week bills in August and September and 2- and 5-year notes in 

August and September. A cash management bill may be needed to cover the low point in the 

cash balance in early September. The tentative auction calendars for August, September, and 

October are included in the chart package which was distributed today. 

5. We estimate Treasury net market borrowing to be in a range of $50 billion to 

$55 billion for the October-December quarter, assuming a $30 billion cash balance on 

December 31. 

6. The Treasury has published proposed changes in the state and local government 

series securities program (commonly called "SLGS") for comment in the Federal 

Register. The changes are designed to make SLGS more flexible, competitive, cost 

effective securities. We want to help state and local governments comply with yield 

restrictions and arbitrage rebate requirements of the Federal tax laws. Among other things, 

we propose to reduce the Treasury's fee on SLGS which will increase investors' yield. We 

would eliminate the current so-called "all-or-nothing" rule and permit advance refunding 

escrows to blend SLGS with securities acquired in the open market. We would also 

eliminate the current cumbersome certifications and substantially decrease the notice period 

to purchase SLGS. Copies of the proposed regulation, are available in the back of the room, 

and we are encouraging public comment. 

7. As you know, in May, Secretary Rubin announced Treasury's intention to 

issue inflation-protection securities. At the same time, we published in the Federal Register 

an Advance Notice of Proposed Rulemaking seeking comments from market participants on 

what aspects of inflation-protection securities would give them the broadest market appeal. 

We have had more tha n 30 meetings with more than 800 investors, dealers, and other 

interested parties since then, in Washington, New York, Boston, Chicago, San Francisco, 

London, Tokyo, and, by videoconference, Australia. We have received approximately 50 

comment letters in response to the ANPR. Last week, we held a symposium to explore 

further the options for structuring principal and interest payments on the inflation-protection 

securities and we published an additional notice in the Federal Register requesting further 

comment. 

We are currently reviewing and evaluating the comments we have received. Based on 

those comments and our own review, we have made two decisions: 

--First, a comment we received from many people was that it was important for these 

new securities to be eligible for our stripping program from the day of issuance. 

Accordingly, we focused on that area and are now comfortable that we will be able 

to make the new securities strippable as of their issuance. 

--Secondly, we have also received numerous comments on the importance of multiple 

maturities. Accordingly, while we will auction one maturity initially, we plan to 

introduce a range of maturities as soon as the first maturity is established. 
--

--

--

--

We expect to conclude our review of the comments and to announce our decisions 

regarding all of the design details of the inflation-protection securities in September. At that 

time, we will publish a draft for comment of revisions to the Uniform Offering Circular, 

describing the terms and conditions of the new securities and how they will be auctioned. 

8. The November midquarter refunding press conference is scheduled to be held 

on Wednesday, October 30. 

RR1210 

ATTACHMENT 

CASH RAISED 

Including the securities announced in this refunding, we have raised $48.1 billion of 

cash from sales of marketable securities. 

This was accomplished as follows: 

raised $5.3 billion from the 2-year notes issued on July 1 and July 31; 

raised $7.7 billion from the 5-year notes issued on 

July 1 and July 31; 

raised $1.8 billion from the 52-week bills issued July 25; 

raised $3.1 billion from the sale of the 10-year note issued July 15 to refund the 

maturing 7-year note; 

raised $8.8 billion in cash in the regular weekly bills, including those announced 

yesterday; 

-- raised $21.4 billion from the notes and bonds announced today.