Quarterly Refunding Charts

October 31, 2005

Office of Debt Management
2

Financing

Summary of FY 2005 and Near Term O

• Net marketable borrowing for FY 2005 Q4 totaled $52 billio• Net marketable borrowing for FY 2005 was nearly $216 billi

$380 billion for FY 2004

• FY 2005 deficit was $319 billion, versus $413 billion for FY 2• FY 2005 net non-marketable borrowing was a record $58 bil

by a record $67 billion in net SLGS issuance

• FY 2006 Q1 and Q2 Outlook:

– Net marketable borrowing is estimated at $96 billion this 

$171 billion next quarter
3

• Current quarter SLGS net 

issuance is expected to return to historical norms.

• Bill financing was once again 

reduced to accommodate lower financing needs.

• Displays mid- and end-ofmonth coupon outflows for the 

next three months.

• Dec.15 and Jan.15 issuances 

raise all new cash.

Treasury Financing Requirements

($ Billions)

 (Projected) (Actuals) 

Deficit Funding (Def + / Surplus -) 75 69 

Means of Financing

Change in Cash Balance 3 -2 Net Non-Marketable Financing 15 16 Net Marketable Financing 59 52 Other* -2 3 

Net Marketable Financing 59 52 

Bills -9Nominal Notes 56TIPS 15Bonds -9

Notes:Starting Cash Balance 33 33 Ending Cash Balance 30 36 

* Includes direct loan activity, changes in accrued interest, checks outstanding, minor miscellaneous transactions, discouNote: Totals may not add due to rounding.

 July - September 2005 

Maturing Coupons Coupo

Date (Excluding SOMA holdings) Payme

November 15, 2005 38.7 22.3 November 30, 2005 25.3 1.6 

December 15, 2005 0 1.1 

January 3, 2006 26.0 1.7 

January 15, 2006 0 4.4 January 31, 2006 25.6 1.2 

(in dollar billions)

Marketable Treasury Coupon Flows
4

• Total net marketable 

borrowing for FY 2005 was $215.7 billion, the lowest amount since FY 2002.

• FY 2005 was the first annual 

bill net paydown since FY 2000.

• Bills were paid down despite 

reduced coupon issuance.

• Unanticipated individual and 

corporate tax receipts in September led to higher midmonth balances.

Treasury Quarterly Net Marketable Borrowing

Calendar Quarter

52.1

52.5

15.1

82.6 60.3 81.5

145.9

-163.4

74.4

31.3

111.3 113.4 84.2

17.8

-200-160-120

-80-40

0

4080

120160

I-01 II III IV I-02 II III IV I-03 II III IV I-04 II 

$ billions

BuybacksOver 10 years5-10 years2-under 5 yearsBills

Treasury Daily Operating Cash Balance

0

102030405060708090

Oct Nov Dec Jan Feb Mar Apr May Jun J

$ billions

FY 2004FY 2005FY 2006

Note: Data through 
5

• Another strong quarter for 

net cash raised in State and Local Govt. Series (SLGS) issuance.

• FY 2005 non-marketable 

net cash was a record $58 billion.

• OMB deficit forecasts are 

within historic norm.

Treasury Quarterly Net Borrowing from Nonmark

 Calendar Quarter

-8.0

-5.0

-10.1

-2.2 -1.4

-1.7

-10.6

0.8

-5.5

-0.1 -0.7

7.6

-2.4

-8.4

7.6

0.8

4.5 3.9

-15-10

-5

05

1015202530

I 00 II III IV I 01 II III IV I 02 II III IV I 03 II III IV I 04 II 

$billions

State and Local Govt. SeriesSavings BondsForeign Series

Erratum: The shown chart reflects corrected OMB MSR FY2006 forecast. The cha

used calendar GDP instead of FY GDP in calculations. 

Drivers of Financing Needs 

-5

05

1015202530

1960 1965 1970 1975 1979 1984 1989 1994 

Percentage of GDP

OutlaysRevenueGDP GrowNet Intere

SOURCE: OMB MSR FY 2006

Average H

Difference
6

• Financing schedule remains 

flexible.

• Percentage changes in auction 

sizes are within manageable levels (based on end of FY 2005 issuance allocation and assuming that changes in auction sizes are distributed equally across auctioned securities to meet projected future financing needs).

Projected Net Marketable Borrowing and Hypothetical A

-5.0%-2.5%

0.0%2.5%5.0%7.5%

10.0%12.5%15.0%

2005 2006 2007 2008 200

Percent

Net Marketable Borrowing (RHS)

Projections are based on current OMB MSR budget estimates. Future residual financing needs are spreasecurities to maintain constant maturity of issuance.

Bars represent percentage change in average auction size from prior year (LHS)

Current Auction SizeBills $15.9B (ave2-year $20B3-year $18B5-year $13B10-year $13B issue/30-year $12.5B (ave5-year TIPS $12B issue/10-year TIPS $9B issue/$20-year TIPS $10B issue/
7

Debt Portfolio

Assumptions used in the next 5 charts:

• Future residual financing needs are spread equally across auctioned 

maintain constant maturity of issuance, based on end of FY 2005 issallocation 

• Current OMB MSR budget estimates• Average maturity of total outstanding stabilizes at 55 months over t

due to re-introduction of the 30-year bond 

• Average maturity of issuance rises to 53 months due to re-introduct

year bond and remains stable over the forecast period

• The percent of debt maturing with 3 years or less to maturity declin

57 percent
8

• Average maturity stabilizes with 

semi-annual 30-year bond issuance.

• Outstanding bills and 2-3 year 

notes are projected to continue on 

a downward trend.

• 5-year notes and TIPS grow as

a share of debt outstanding.

DEBT MATURITY MEASURES

2030405060708090

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 20

months

Average Maturity of Issua

Average Maturity 

As of September 30, 2005 

Projections are based on current OMB MSR budget estimates. Future residual financing needs are spsecurities to maintain constant maturity of issuance.

Distribution of Marketable Debt Outstanding 

0%5%

10%15%20%25%30%35%

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 

BILLS 2-3 YR NOTES 4-7 YR NOTES 8-10 YR NOTES 

Projections are based on current OMB MSR budget estimates. Future residual financing needs are ssecurities to maintain constant maturity of issuance.
9

• Debt maturing with a 

residual maturity of 3 years or less trends toward lower end of historical ranges, due to lower amounts of bills outstanding. 

• Issuance allocation across 

securities is projected to remain constant during the next 5 years, reflecting the constant maturity of issuance assumptions.

Percentage of Debt Maturing in Next 12 to 

25%30%35%40%45%50%55%60%65%70%75%

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 20

Maturing in 12 Months

Maturing in 24 Months

Maturing in 36 Months

Projections are based on current OMB MSR budget estimates. Future residual financing needs are sp

securities to maintain constant maturity of issuance.

Percentage Breakdown of Annual Issu

0%

10%20%30%40%50%60%70%80%

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2

Bills 2-3 yrs 4-7 yrs 10-15 yrs B

Projections are based on current OMB MSR budget estimates. Future residual financing needs are ssecurities to maintain constant maturity of issuance.
10

• Net marketable borrowing is 

mostly concentrated in 5- and 10-year note issuance through FY 2008.

Treasury Annual Net Market Borrow

-300-200-100

0

100200300400500

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 

$ Billions

Buybacksover 10 years5-10 years2-under 5 yearsBills

Projected

Projections are based on current OMB MSR budget estimates. Future residual financing needs are ssecurities to maintain constant maturity of issuance.
11

Uncertainty

• Larger financing need for FY 2006 as a result of increase

maturing debt and fiscal needs

• Risks to projected financing needs during the next 5 year

require significant adjustments to Treasury’s financing s
12

• More recent estimates 

reflect anticipated hurricane relief spending.

• Current coupon pattern and 

issuance amounts will provide around $220 billion of new financing in FY 2006.

Financing Residuals Given Current Issuance Calendar 

Assumes current coupon issuance pattern and issuance amount-- Weekly bill issuance at leve

outstanding FY $ amounts equal to September 30, 2005 total outstandin

-350-250-150

-50

50

150250350450550650

2006 2007 2008 2009 

Fiscal Years

$ billions

N et financing implied by FY06 OM B 

M SR Budget deficit forecast

N et financing plus average absolute 

N et financing error in OM B estimateminus avg. absolute error in OM B est.

Bars indicate estimated change in financing required in given year for different deficit outcomes

N ote: Average historical errors were estim ated with a linear least-squares regression using O M B 's budget forecasts since the 1989 Bu

 and the M SR since 1998.

Primary Dealer

Current: 

Range based on average absolute forecast error 26

Estimates as of: Oct. 2

Note: Ranges based on errors from 1997-2005.

* Primary Dealers reflect average estimate.

FY 06 Deficit Estimates 
13

Capital Markets

• Foreign holdings of Treasury debt were stable over the quar

Treasury’s share of the money market declined
14

• Foreign holdings of Treasury 

debt remain at historical highs.

• Treasury’s share of the money 

market declined, mainly due to a Treasury bill paydown in the third quarter of FY2005.

Foreign Holdings as a Percent of Total Privately Held Pu

0%

10%20%30%40%50%60%

1993 1994 1995 1996 1997 1998 1999 2000 2001 2

Calendar Year

Percent

Estimated foreign holdings as % of private. 2/Foreign and International Institutional Holdings at FRBNY as% of private. 3/

* 

Benchmark Revisions

1/ Privately held debt excludes holdings of the Federal Reserve System.2/ Data through August 31, 2005. 3/ Source: Federal Reserve Bank of NY statistical release H4.1.

Outstanding Short-term Marketable Treasury Securities as a Per

Market Instruments

25%30%35%40%45%50%55%60%65%70%75%

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 200

Calendar Quarters

Short-term Marketable Treasuries = Treasury bills and Treasury coupon securities with 1 year or leMoney Market = Short-term Treasury securities, commercial paper, and open market paper.Sources: U.S. Treasury and U.S. Federal Reserve Board of Governors Flow of Funds statistical re
15

• Turnover in nominal 

Treasuries and TIPS are increasing.

0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%

4/22/1998 10/22/1998 4/22/1999 10/22/1999 4/22/2000 10/22/2000 4/22/2001 10/22/2001 4/22/2002 10/22/2002 4/22/2003 10/22

% Turnover 

3-month Moving Averages of Daily TIPS and Nominal Treasuries Transaction

and amount outstanding (ex-SOMA holdings)

Nominal Treasury turnover (RHS)

TIPS turnover (red points are a
16

Auction Release Time Performanc

No current quarter exceptions to Treasury’s 2 minute auction release t

Auction Release Times for November 2004 - October 2005

Data through October 26, 2005

0:000:301:001:302:002:303:003:304:004:305:00

11/1/04 11/23/04 12/14/04 1/11/05 2/7/05 3/1/05 3/28/05 4/18/05 5/12/05 6/6/05 07/05/05 07/27/05 08/23/05 09/13/05 

(In Minutes and Seconds)

**

* Release time of 28 minutes, 19 seconds* Release time of 28 minutes, 24 seconds

Target release time range