MINUTES OF THE MEETING OF THE 

TREASURY BORROWING ADVISORY COMMITTEE 

OF THE PUBLIC SECURITIES ASSOCIATION 

FEBRUARY 2 AND 3, 1993 

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

Department. All members were present, except Mr. de la 

Gueronniere (see the attached list). 

I gave the Committee an informational background briefing 

updating Treasury borrowing estimates and historical information 

relevant to the February midquarter refunding. The borrowing 

estimates and background information had been released to the 

public on February 1, 1993. 

The Committee also received a briefing by a Treasury staff 

member on current economic conditions, which was followed by a 

question-and-answer period. Acting Assistant Secretary Danker 

then nchargedll the Committee to make recommendations on the 

February Treasury refunding and related matters (see the attached 

Charge). The meeting adjourned at 11:OO a.m. 

The Committee reconvened at 1:00 p.m. at the adi is on Hotel. 

All members were present, except Mr. de la Gueronniere. The 

Committeels discussion began with overall Treasury financing 

needs in the first and second calendar quarters of 1993. It was 

noted that the Treasury cash position had been relatively strong 

late in December and in January and that the Treasury had pared 

the sizes of recent issues. 

The Committee voted on the total size of the refunding, with 

11 members voting in favor of $37 billion package and 7 in favor 

of $36 billion. The Committee then voted, by 15 to 3, to 

recommend a refunding consisting of $15.5 billion of 3-year 

notes, $11.25 billion of lo-year notes, and $10.25 billion of 30- 

year bonds. The recommended issue sizes are the same as those 

for the November 1992 refunding. 

Tho Committee then discussed whether to reopen the most 

recent 10-year note, the 6-3/88 of 8/15/02. A reopening of the 

30-year was not discussed. The advantages of reopening the 6- 

3/88 were that it had again become scarce in the collateral 

market (although not as scarce as it had been before it was 

reopened in November) and that a reopening would add to market 

liquidity in the issue. The disadvantages were that a new issue 

probably might save the Treasury a bit in financing costs and 

that reopening might encourage market participants to rely too 

heavily on the 6-3/88 as a hedging vehicle, instead of spreading 

their hedging activities over other similar-maturity Treasury 

securities. The Committee decided not to recommend reopening the 

6-3/88 by a vote of 16 to 2. 
For the remainder of the January-March quarter, the 

Committee recommended issuing 2- and 5-year notes in the sizes 

issued in January, increasing the 52-week bills to $15 billion, 

and increaming weekly bills to $24 billion. The Committee also 

recommended a cash management bill in early March to mature after 

April 15. 

In the April-June quarter, the Committee recommended, by 

consensus, that the Treasury hold the sizes of coupon securities 

level at the sizes sold most recently and reduce Treasury bill 

sizes. The Committee also believed cash management bills would 

be need to cover the low-points in cash in early April and June. 

The Committee unanimously recommended a $35 billion or somewhat 

higher cash balance on June 30. 

The members were unanimous in their agreement that the 

Committee would be available to advise the Treasury in its study 

of the composition of Treasury market borrowing in the future. 

The meeting adjourned at 3:00 p.m. 

The Committee reconvened at 9:00 a.m. at the Treasury. All 

members were present, except Mr. de la Gueronniere. The Chairman 

presented the Committee report to Acting Assistant Secretary 

Danker. There was a question-and-answer period related to the 

recommendations. 

The meeting adjourned at 10:OO a.m. 

1 K. Oumeley, ~kkector iY fice of Market Finance 

omemtic Finance 

February 3, 1993