ATTACHMENT

CASH RAISED

Including the securities announced in this refunding, we have raised $9.7 billion of
cash from sales of marketable securities.

This was accomplished as follows:

raised $0.5 billion from the 2-year notes issued January 31;

raised $3.9 billion from the 5-year notes issued January 31;

raised $3.8 billion from the 52-week bills;

paid down $7.9 in the 7-year notes maturing January 15;

raised $7.0 billion from the sale of the new 10-year indexed note to be
issued tomorrow, February 6 and dated January 15;

paid down $19.4 billion in cash in the regular weekly bills, including

__ those announced yesterday;

raised $21.75 billion from the notes and bonds announced today.


DEPARTMENT OF THE TREASURY

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

FOR IMMEDIATE RELEASE
February 5, 1997

REMARKS BY ROGER L. ANDERSON
DEPUTY ASSISTANT SECRETARY FOR FEDERAL FINANCE
FEBRUARY 1997 TREASURY QUARTERLY REFUNDING
PRESS CONFERENCE

Good afternoon. I will begin with today's refunding announcement and the terms of the
regular Treasury February quarterly refunding. 1 will also discuss Treasury financing requirements
for the balance of the current calendar quarter and our estimated cash needs for the April-June 1997
quarter. I will then discuss certain other debt management issues.

“1, We are offering $39.75 billion of notes and bonds to refund $18.0 billion of privately
held notes maturing on February 15 and to raise approximately $21.75 billion of cash.

The three securities are:

-- First, a 3-year note in the amount of $17.75 billion, maturing on February 15, 2000.
This note is scheduled to be auctioned on a yield basis at 1:00 p.m. Eastern time on
February 11.

- Second, a 10-year note in the amount of $12.0 billion, maturing on February 15,
2007. This note is schéduled to be auctioned on a yield basis at 1:00 p.m. Eastern
time on Wednesday, February 12

- Third; a 30-year bond in the amount of $10.0 billion, maturing on February 15, 2027.
This bond is scheduled to be auctioned on a yield basis at 1:00 p.m. Eastern time on
Thursday, February 13

-MORE-

RR-1485

For press releases, speeches, public schedules and official biographies, call our 24-hour fax line at (202) 622-2040

3)


2. As announced on Monday, February 3, we estimate a net market
borrowing need of $50.0 billion for the January-March quarter. The estimate assumes a
$20 billion cash balance at the end of March. Including the securities in this refunding, we
have raised $9.7 billion of cash from sales of marketable securities. See the attachment for
details.

3. The Treasury will need to raise $40.3 billion in market borrowing during
the rest of the January-March quarter. This financing can be accomplished through
regular sales of 13-, 26-, and 52-week bills in February and March and 2-and 5-year notes
in February and March. Cash management bills may be needed to cover the low points in
the cash balance in March.

The tentative auction calendars for February, March and April are included
in the chart package which was distributed today.

4. We estimate Treasury market borrowing to result in a pay down in the
range of $10 to $15 billion for the April-June quarter, assuming a $35 billion cash balance
on June 30.

5. On January 29, Treasury successfully auctioned its first inflation-indexed
notes. We are very pleased with the reception of this new form of financing. This is a
good start to what will become a substantial part of Treasury’s issuance program. The
next auction will be in April.

6. At last quarter’s press conference, we described the major changes we had
made to the SLGS program. On January 24, the Vice President’s office recognized the
efforts of our staff, along with staff from Public Debt, Tax Policy, and General Counsel’s
office with a Hammer Award for redesigning the SLGS program to make SLGS more
attractive and easier for state and local government entities to use.

7. ‘Last quarter, we announced that we intend to change the way Treasury bill
auctions are announced. The change will exclude from the announced offering amount of
each bill auction any amounts that will be purchased by the Federal Reserve’s System
Open Market Account. The amount announced will be awarded to the public and to
foreign official accounts to replace maturing bills. Awards to the Federal Reserve for the
System Open Market Account to replace maturing bills will be treated as additions to the
announced size of the auctions. We will be making this change in’ order to provide more
complete information to market participants. We are currently completing the testing of
modifications to one of our computer systems to incorporate this change, and we expect

_ to announce the effective date of this change within the next few weeks.

8. In February 1995, Treasury began requiring bids in note and bond auctions
to be expressed in three decimal places. At the time, Treasury did not extend three
decimal bidding to bill auctions because three-decimal bidding with .001 percent minimum
increments provides unique prices only for bills with maturities greater than 360 days. We


asked the Borrowing Advisory Committee yesterday for their views on instituting three
decimal bidding with minimum increments of .005 percent, in effect half-decimal bidding,
for regular Treasury bill auctions. The Committee unanimously recommended that we
make such a change. Accordingly, we anticipate seeking public comment on this
suggestion shortly.

9. Wealso asked the Borrowing Advisory Committee for their views on
certain recent bill auctions that have been somewhat smaller in size than has been the case
in the past years. The Committee did not feel that such small sizes had caused problems
for the market, but did express some concern for Treasury’s ability to enforce the 35%
tule in such auctions. Accordingly, the Committee recommended that we reduce the $2
billion net long position reporting limit to $1 billion for bill auctions only. We anticipate
seeking public comment on this suggestion shortly also.

10. The May quarterly refunding press conference is scheduled to be held on
Wednesday, April 30.

-30-