Quarterly Refunding 

U.S. Department 

Office of Deb
Office of Debt Management

Financing 

Near Term Outlook 

 FY 2008 Q3 and Q4 Outlook:

• We estimate a pay down of $35 billion this quarter an

marketable borrowing of $112 billion next quarter.

• The impact of the fiscal stimulus program, the redem

nearly $120 billion in securities by the Federal Reservdecline in state and local government debt issuance, w

increased marketable borrowing needs for the remainyear.
Office of Debt Management

 Treasury borrowing 

was considerably higher in FY Q2 and primarily financed through bill issuance. 

 Normal mid-month 

and end of month outflows related to coupons will be compounded by weekly issuance of rebate checks related to the fiscal stimulus program.

Marketable Treasury Coupon Flows 

Date

Maturing Coupon 

Securities 

(Excluding SOMA 

holdings)

Coupo

Paymen

May 15, 2008 74 21 May 31, 2008 22 4 June 15, 2008 0 1June 30, 2008 21 4 July 15, 2008 0 9July 31, 2008 20 3 August 15, 2008 43 26 August 31, 2008 22 4 

Treasury Financing Requirements 

(Projected) (Actuals) 

Deficit Funding (Def + / Surplus -) 201 206 

Means of Financing

Change in Cash Balance 32 11 

Net Non-Marketable Financing -9 -8 

Other * 22 -42 

Net Marketable Financing 156 244 

Net Marketable Financing 156 244 ** 

Bills 208Nominal Notes 26TIPS -2Bonds 13

Notes:

Starting Cash Balance 57 57 Ending Cash Balance 25 46 

* Includes SOMA redemptions, direct loan activity, changes in accrued interest, checks outstanding, minor miscellaneous transactions, discou

** Excludes System Open Market Account (SOMA) redemptions of $53.5 billion in the Jan.-Mar. quarter and $27.2 billion in redemptions as 

For the current fiscal year (as announced through April 25) SOMA has redeemed $119.9 billion in marketable Treasury securities.

Note: Totals may not add due to rounding.

 January - March 2008
Office of Debt Management

 Cash balances continue to be 

volatile given unexpected redemptions, less predictable receipts, and timing issues related to tax refunds.

 The rebates associated with the 

fiscal stimulus program will add to this volatility.

 Total net marketable borrowing 

for Q2 FY 2008 was a record $244 billion with the greatest portion of net new cash raised from bills and medium-term nominal notes.

Treasury Quarterly Net Marketable Borrowing

Fiscal Quarter

82.6

111.3

60.3 81.5

113.4

145.9

31.3

89.0

97.8

144.7

-77.2

53.0

92.7

159.3

-91.0

48.9 46.

-200-160-120

-80-40

0

4080

120160200240

I-03 II III IV I-04 II III IV I-05 II III IV I-06 II III IV I-0

$ billions

Bills 2-under 5 years5-10 years 5-10 year TIPSOver 10 years Over 10 year TIPS

Note: Includes SOMA redemptions.

Treasury Daily Operating Cash Balance

0

255075

100125

Oct Nov Dec Jan Feb Mar Apr May Jun Ju

$ billions

FY 2006FY 2007FY 2008

Note: Data thro
Office of Debt Management

 Net non-marketable issuance 

continues to decline, particularly in the state and local government sector. 

 In addition, this is the 

seventeenth consecutive month in which savings bonds have been a net drain on cash, totaling nearly $39 billion since November 2006. 

 Bill issuance increased in FY 

Q2 2008, with a significant portion of this increase related to redemptions by the Federal Reserve.

Treasury Quarterly Net Borrowing from Nonmarketa

 Fiscal Quarter

7.6

-2.4

-8.4

7.6

0.8

4.5 3.9

-6.0

1.1

16.6

24.4

16.3

10.7

-2.2

4.1

-6.8

15.7

21.

-15-10

-5

05

1015202530

I 03 II III IV I 04 II III IV I 05 II III IV I 06 II III IV I 07 II 

$billions

State and Local Govt. SeriesSavings BondsForeign Series

Percentage Breakdown of Quarterly Issua

Fiscal Year 

0%

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

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 

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

Note: Data through March 31, 2008.
Office of Debt Management

Debt Portfolio Considerations

Assumptions used in the next 3 charts: Future residual financing needs are spread proportionally acros

securities and are derived from hypothetical initial coupon auc

 These sizes are based on the most recently announced amounts 

assume the outstanding level of bills on March 31, 2008.

 OMB 2009 Budget deficit estimates used for FY2008-2013. Using the above assumptions, over the next 6 years:

 Average maturity of total outstanding and average maturity of 

settle to about 55 and 58 months, respectively. 

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

56 percent.
Office of Debt Management

 Under current assumptions, 

average maturity of issuance peaks in FY 2008 and then declines thereafter.

 If future financing needs are 

spread proportionally, current issuance patterns would lead to a steadily increasing share of medium to longer-term debt.

DEBT MATURITY MEASURES 

2030405060708090

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 

months

Average Maturity of Issuance 1/

Average Maturity of Marketable Debt Outstanding 2/

Net financing projections for FY 2008-2013 are based on OMB 2009 Budget estimates. Future residual financing needs are spread propor

derived from hypothetical initial coupon auction sizes. These sizes are based on the most recently announced amounts and assume the out

1 Quarterly data are actuals through March 31, 2008. Actuals and fiscal year projections use a 4-quarter average. 2 Quarterly data are actuals through March 31, 2008. Fiscal year projections are yearly data. 

Distribution of Marketable Debt Outstanding by 

0%5%

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

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2

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

Net financing projections for FY 2008-2013 are based on OMB 2009 Budget estimates. Future residual financing needs are 

securities and are derived from hypothetical initial coupon auction sizes. These sizes are based on the most recently announlevel of bills on March 31, 2008.
Office of Debt Management

 Projected short-term debt 

rollover percentages will decline before stabilizing if future financing needs are spread proportionally.

 Maturing 3-year note and 

5-year note securities in the coming years lead to increased near- and medium-term financing needs. 

Coupons Maturing

April 30, 2008-February 15, 2038

0

20406080

100120

30-APR-2008

15-MAY-2008

31-MAY-2008

30-JUN-2008

31-JUL-2008

15-AUG-2008

31-AUG-2008

15-SEP-2008

30-SEP-2008

15-OCT-2008

31-OCT-2008

15-NOV-2008

30-NOV-2008

15-DEC-2008

31-DEC-2008

15-JAN-2009

31-JAN-2009

15-FEB-2009

28-FEB-2009

15-MAR-2009

31-MAR-2009

15-APR-2009

30-APR-2009

15-MAY-2009

31-MAY-2009

15-JUN-2009

30-JUN-2009

15-JUL-2009

31-JUL-2009

15-AUG-2009

31-AUG-2009

15-SEP-2009

30-SEP-2009

15-OCT-2009

31-OCT-2009

15-NOV-2009

30-NOV-2009

15-DEC-2009

31-DEC-2009

15-JAN-2010

31-JAN-2010

15-FEB-2010

28-FEB-2010

15-MAR-2010

31-MAR-2010

15-APR-2010

15-MAY-2010

15-JUN-2010

15-JUL-2010

15-AUG-2010

15-SEP-2010

15-OCT-2010

15-NOV-2010

15-DEC-2010

15-JAN-2011

15-FEB-2011

28-FEB-2011

31-MAR-2011

15-APR-2011

30-APR-2011

31-MAY-2011

30-JUN-2011

31-JUL-2011

15-AUG-2011

31-AUG-2011

30-SEP-2011

31-OCT-2011

30-NOV-2011

31-DEC-2011

15-JAN-2012

31-JAN-2012

15-FEB-2012

29-FEB-2012

31-MAR-2012

15-APR-2012

30-APR-2012

31-MAY-2012

30-JUN-2012

15-JUL-2012

31-JUL-2012

15-AUG-2012

31-AUG-2012

30-SEP-2012

31-OCT-2012

15-NOV-2012

30-NOV-2012

31-DEC-2012

31-JAN-2013

15-FEB-2013

28-FEB-2013

31-MAR-2013

15-MAY-2013

15-JUL-2013

15-AUG-2013

15-NOV-2013

15-JAN-2014

15-FEB-2014

15-MAY-2014

15-JUL-2014

15-AUG-2014

15-NOV-2014

15-JAN-2015

15-FEB-2015

15-MAY-2015

15-JUL-2015

15-AUG-2015

15-NOV-2015

15-JAN-2016

15-FEB-2016

15-MAY-2016

15-JUL-2016

15-AUG-2016

15-NOV-2016

15-JAN-2017

15-FEB-2017

15-MAY-2017

15-JUL-2017

15-AUG-2017

$ Billions 10 YR IIS NOTE 10 YR NOTE 

20 YR IIS BOND 3 YR NOTE 30 YR IIS BOND 5 YR IIS NOTE 

Percentage of Debt Maturing in Next 12 to 36 

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

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 

Maturing in 12 Months

Maturing in 24 Months

Maturing in 36 Months

Net financing projections for FY 2008-2013 are based on OMB 2009 Budget estimates. Future residual financing needs are 

securities and are derived from hypothetical initial coupon auction sizes. These sizes are based on the most recently annoulevel of bills on March 31, 2008.
Office of Debt Management

Uncertainty

 OMB FY 2009 Budget estimates, published in February 2008, i

increased borrowing need in FY 2008 and 2009, with an eventusurplus in FY 2012.

 Recent SOMA redemptions have increased borrowing requirem

uncertainty in near-term cash balances.

 Volatility in projected receipts and reduced non-marketable deb

could also lead to increased marketable financing needs.
Office of Debt Management

 State and Local Government 

Series (SLGS) debt issuance has been negative over the past three quarters. 

 Net SLGS fiscal year to date 

in 2008 is -$10.2 billion, while in FY2007 total net SLGS issuance was +$57.7 billon, representing a significant reversal.

State and Local Governments (SLGS) 

Calendar year

0

102030405060

$ Billions

Gross IssuesRedemptions

-10

-5

05

1015202530

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 200

$ B illions

Net SLGs
Office of Debt Management

 Bills have been a major source 

of borrowing in FY 2008, rising to $1,026 billion versus $958 billion.

 Bills privately-held have risen 

from $691 billion to $955 billion, a net increase of $264 billion.

 Bill issuance increased sharply 

in the first and second quarter of the fiscal year.

 Most of the increase can be 

attributed to the nearly $200 billion in Federal Reserve (publicly-held) redemptions or outright sales.

Weekly Bills Outstanding

FY 2003-2008

$750$800$850$900$950

$1,000$1,050$1,100

10/3

10/10 10/17

10

3/20 4/17 4/10 4/3 3/27 4/24

5/1

5/8

5/15

5/22

5/29

6/5

6/12

6/19

6/26

7/3

7/10

7/17

7/24

7/31

8/7

8/14

8/21

8/28

9/4

9/11

9/18

9/25

FY '03FY '04FY '05FY '06FY '07FY '08

Weekly Bills Issued

FY 2003-2008

$20$30$40$50$60$70$80$90

$100

10/3

10/10 10/17

10/

3/20

3/27 4/10 4/3 4/17

4/24

5/1

5/8

5/15

5/22

5/29

6/5

6/12

6/19

6/267/3

7/10

7/17

7/24

7/31

8/7

8/14

8/21

8/28

9/4

9/11

9/18

9/25

FY '03FY '04FY '05FY '06FY '07FY '08
Office of Debt Management

 Primary dealers 

currently estimate a FY2008 deficit of $414 billion.

 The projection of 

fiscal deficits remains challenging given the uncertainty related to the pace of economic growth.

Error Bands About Current Deficit Estimates

-600-500-400-300-200-100

0

100200300400

2008 2009 2010 2011 201

Fiscal Years $ billions

Deficit estimates implied by FY2009 OMB Budget

Deficit estimate plus one standard deviation about OMB estimate

Deficit estimdeviation ab

Source: Standard deviations for estimates for current year and years forward and actual deficit or surplus are from OMB's 2009 Budget Table 20-7 and Table 16-2.

FY 08 Deficit Estimates 

Primary Dealers* 

Current: 414 Range based on average absolute forecast error 362-466 3Estimates as of: April 08 Ma

Note: Ranges based on errors from 2003-2007.

* Primary Dealers reflect average estimate.