MINUTES OF THE MEETING OF THE 

TREASURY BORROWING ADVISORY COYMITTEE 

OF THE PUBLIC SECURITIES ASSOCIATION 

AUGUST 3 AND 4, 1993 

The Committee convened at 9:00 a.m. at the Treasury 

Department. All members were present, except Mr. Napoli. See 

the attached list. 

I gave the Comaittee an informational background briefing 

updating Treasury borrowing estimates and historical information 

relevant to the Treasury August midquarter refunding. The 

borrowing estimtes and background information had been released 

to the public on August 2, 1993. 

The Committee also received a briefing by a Treasury staff 

member on current economic conditions. Under Secretary Newman 

then gave the Committee its Wchargew, which was to make 

recommendations on the August Treasury refunding and related 

matters. See the attached Charge. The meeting adjourned at 

10:35 a.m. 

The Committee reconvened at 2:35 p.m. at the Madison Hotel. 

All members were present, except Mr. Napoli. A Coxunittee member 

circulated a draft of financing schedules (attached) as the 

starting point of the discussion. The meeting began with a 

discussion of the likely Treasury overall financing need in the 

rest of the July-September quarter. The Committee voted 

unanimously to recommend that the following issues be sold in the 

August refunding: 

$16.5 billion of 3-year notes, maturing 8-15-96 

$11.0 billion of 10-year notes, maturing 8-15-03 

$11.0 billion of 30-year bonds, maturing 8-15-23. 

No reopenings were recommended. The Committee believed that it 

is appropriate for the Treasury to offer $11.0 billion of 10-year 

notes in the August refunding, an increase of $0.25 billion from 

the amount sold in the Hay 1993 refunding, in order to signal 

that the Treasury may increase the size of 10-year offerings over 

time . 

The Committee considered, but did not vote on, a financing 

pattern during the rest of the quarter. The Committee discussed 

the possibility of increasing the size of the regular monthly 5- 

year notes, but deferred making a recommendation until an 

unspecified later date. The Committee voted unanimously to 

recommend a $40 billion cash balance at the end of September. 

The Committee consensus estimate was that the Treasury's 

October-December borrowing requirement may be closer to $85 

billion than to Treasury's estimate of $95-$100 billion. The 
Committee was mindful that the Treasury will not issue a 7-year 

note or a 30-year bond during the quarter. The consensus was 

that the Treasury should increase the sizes of regular weekly and 

52-week bills, monthly 2- and 5-year notes, and the 3- and 10- 

year notes in the November refunding. The consensus was also 

that the Treasury should issue fewer regular bills, if actual 

borrowing needs are closer to the Street estimate, and that the 

Treasury should issue large amounts of cash management bills in 

November to mature in January and April, in order to manage cash 

and debt around the tax payment dates. The committee voted 

unanimously to recommend a Treasury cash balance of $35 billion 

on December 31. 

The Committee unanimously recommended that the Treasury 

extend the single-price auction experiment for monthly 2- and 5- 

year note auctions for one year beyond the auctions in August 

1993. The Committee believed that the results of the experiment 

have been inconclusive to date, there have been no negative 

effects from the experiment, and extension might test the auction 

technique under a wider range of market conditions. Prior to the 

vote, the Committee discussed whether to recommend expanding the 

experiment to other Treasury securities, but no vote was taken, 

since the Treasury had not asked the Committee to consider this 

question. 

The meeting adjourned at 4:15 p.m. 

The Committee reconvened at 8:00 a.m. at the Treasury. All 

members were present, except Mr. Napoli. The Chairman presented 

the Committee report to Under Secretary Newman. There was a 

question-and-answer period related to the recommendations. 

The meeting adjourned at 8:30 a.m. 

Domestic Finance 

August 6, 1993 

Attachments 

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