Quarterly Refunding 

U.S. Department 

Office of Deb
Office of Debt Management

Financing Near Term Outlook

 FY 2006 Q3 and Q4 Improved Outlook:

• We estimate a pay down of $51 billion net marketable de

quarter and net marketable borrowing of $89 billion next 

• Q3 estimated pay down is $21 billion greater than estima

January 2006
Office of Debt Management

 Q1 borrowing was less than 

projected, due to strong receipts, under runs in outlays and lower than anticipated end of quarter cash balances.

 A pay down in net nonmarketable issuance was 

the first since Q3 2004.

 May 15 outlays are large. April 15 and June 15 

issuances raise all new cash.

Marketable Treasury Coupon Flows 

Date

Maturing Coupons 

(Excluding SOMA 

holdings)

Coupo

Payme

March 31, 2006 26 2 April 15, 2006 0 3 April 30, 2006 26 2 May 15, 2006 57 22 May 31, 2006 24 2 June 15, 2006 0 1 June 30, 2006 25 2 July 15, 2006 17 5 July 31, 2006 23 2 

Treasury Financing Requirements 

(Projected) (Actuals) 

Deficit Funding (Def + / Surplus -) 213 179 

Means of Financing

Change in Cash Balance 22 28 Net Non-Marketable Financing -8 -2 Other* 10 -5 Net Marketable Financing 188 158 

Net Marketable Financing 188 158 

Bills 78Nominal Notes 49TIPS 21Bonds 10

Notes:

Starting Cash Balance 37 37 Ending Cash Balance 15 8 

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

 January - March 2006
Office of Debt Management

 Cash balances in 2nd half of 

March were below previous year balances, due in part to debt ceiling constraints.

 Net marketable borrowing 

set a record in Q1 2006. The previous record was set in Q1 2004.

 Bill issuance was increased 

in anticipation of April receipt inflows.

Treasury Quarterly Net Marketable Borrowing

Calendar Quarter

17.8

-163.4

74.4

52.1

52.5

15.1

84.2

82.6

111.3

60.3 81.5

113.4

145.9

31.3

89.0

97

-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 III IV 

$ billions

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

Treasury Daily Operating Cash Balance

0

102030405060708090

Oct Nov Dec Jan Feb Mar Apr May Jun Ju

$ billions

FY 2004FY 2005FY 2006

Note: Data through A
Office of Debt Management

 State and Local Govt. Series 

(SLGS) issuance declined sharply from record levels, due in part to the suspension of SLGS caused by the debt limit impasse.

 Given OMB budget 

estimates, revenues as a share of GDP are expected to remain below historical average, while the difference between outlays and revenues as a share of GDP declines sharply. 

Treasury Quarterly Net Borrowing from Nonmarket

 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

-6.0

1.1

-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 III IV 

$billions

State and Local Govt. SeriesSavings BondsForeign Series

Drivers of Financing Needs

-5

05

10152025

1960 1965 1970 1975 1980 1985 1990 1995 

Fiscal Year

Percentage %

Net Interest as a Percentage of GDP Nominal GDP GrowthReceipts as a Percentage of GDP Outlays as a Percentage of GDP

Average H

Difference (1

2.1%

Source: OMB Budget FY 2007
Office of Debt Management

 Given OMB budget 

estimates, changes in auction sizes are expected to increase in FY 2007. 

Projected Net Marketable Borrowing and Hypothetical A

-7.5%-5.0%-2.5%

0.0%2.5%5.0%7.5%

10.0%12.5%15.0%

2006 2007 2008 2009 2010 

Percent

Net Marketable Borrowing (RHS)

Internal Treasury budget estimate used for FY 2006. Projections for FY 2007-2011 are based on OMB 200residual financing needs are spread proportionally across auctioned securities to maintain constant maturity 

Bars represent percentachange in average auctiofrom prior year (LHS)

Initial Hypothetica

Bills $12-year $23-year $25-year $110-year $130-year $15-year TIPS $810-year TIPS $820-year TIPS $9
Office of Debt Management

Debt Portfolio

 Average maturity of total outstanding debt remains stable at 55 

the next 5 years 

 Average maturity of issuance stabilizes between 54-55 months  The percent of debt maturing with 3 years or less to maturity dec

around 58 percent

Assumptions used in the next 5 charts: Future residual financing needs are spread proportionally across 

securities to maintain constant maturity of issuance, based on hinitial auction sizes 

 OMB 2007 Budget estimates, with internal Treasury estimate fo

fiscal year
Office of Debt Management

 Average maturity stabilizes with 

assumption of stable 30-year bond issuance.

 The end of FY 2006 average 

maturity of issuance (a 4-quarter moving average)is expected to reach nearly 55-months.

 On current paths, bills’ share of 

the portfolio is projected to fall to near historic lows.

DEBT MATURITY MEASURES 

2030405060708090

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

months

Average Maturity of Issuance 1

Average Maturity of Marketable Debt Outstanding

 Internal Treasury estimate used for FY 2006. Net financing projections for FY 2007-2011 are based on OMB 2007 Budget needs are spread proportionally across auctioned securities to maintain constant maturity of issuance.

1/ Quarterly data are actuals through March 31, 2006. Actuals and FY projections 

use a 4-quarter moving average. 

Distribution of Marketable Debt Outstanding by 

0%5%

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

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

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

Internal Treasury budget estimate used for FY 2006. Projections for FY 2007-2011 are based on OMB 20residual financing needs are spread proportionally across auctioned securities to maintain constant maturi
Office of Debt Management

 Debt with a residual maturity 

of 3 years or less trends toward lower end of historical ranges. 

 2- and 3-year note issuance 

has stabilized, while bill issuance rises from recent lows.

Percentage Breakdown of Annual Issuanc

Fiscal Year 

0%

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

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2

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

Note: Data through March 31, 2006.

Percentage of Debt Maturing in Next 12 to 36 M

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

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 20

Maturing in 12 Months

Maturing in 24 Months

Maturing in 36 Months

Internal Treasury budget estimate used for FY 2006. Projections for FY 2007-2011 are based on OMB 2007 

residual financing needs are spread proportionally across auctioned securities to maintain constant maturity o
Office of Debt Management

 Net marketable borrowing is 

mostly concentrated in 5-and 10-year note issuance through FY 2011.

Treasury Annual Net Market Borrowing

-300-200-100

0

100200300400500

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

$ Billions

Buybacksover 10 years5-10 years2-under 5 yearsBills

Projecte

Internal Treasury budget estimate used for FY 2006. Projections for FY 2007-2011 are based on OMB 20residual financing needs are spread proportionally across auctioned securities to maintain constant maturi
Office of Debt Management

Uncertainty

 Current financing calendar can meet likely ranges of borro

needs without adjustments over this fiscal year
Office of Debt Management

 Deficit estimates have 

declined since January.

 Current coupon pattern and 

issuance amounts will provide approximately $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 levels 

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

-350-250-150

-50

50

150250350450550650

2006 2007 2008 2009 

Fiscal Years

$ billions

Net financing implied by FY07 OMB 

Budget deficit forecast

Net financing plus average absolute 

error in OMB estimate

Net financing

minus avg. absolute error in OMB est.

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

Note: FY 2006 net financing amount is an internal estimate. 

Note: Average historical errors were estimated with a linear least-squares regression using OMB's budget forecasts since the 1989 Budg

1998.

FY 06 Deficit Estimates 

Primary Dealers* 

Current: 356 Range based on average absolute forecast error 279-433 2Estimates as of: April 06 M

Note: Ranges based on errors from 1997-2005.

* Primary Dealers reflect average estimate.
Office of Debt Management

Capital Markets

 Foreign holdings of Treasuries have stabilized, while Trea

share of the money market has reversed a recent trend 
Office of Debt Management

 Foreign holdings of U.S. 

Treasury debt are stable.

 Note that we anticipate a 

benchmark revision soon.

 Non-resident participation in 

U.S. bond markets remains comparable to other G-7 members. 

Foreign Holdings as a Percent of Total Privately Held Public 

0%

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

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 

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 February 28, 2006. 3/ Source: Federal Reserve Bank of NY statistical release H4.1.

0%5%

10%15%20%25%30%35%40%45%50%55%60%65%70%

1998 1999 2000 2001 2002 2003 20

Canada UK U.S. Germany France Japan Italy

NON-RESIDENT PARTICIPATION 

IN G-7 GOVERNMENT BOND MARKE

Sources: Canadian MOF, UK DMO, U.S. TIC, French Tresor, Bundesbank, Japanese MOF websites, Italian Treasury and U.S. TreasuGermany and Canada are through Q3 2005, Oct 2005, and end-2005, respectively. Bundesbank data for Germany reflects non-residefor France and the U.S. are through February 2006.
Office of Debt Management

 Treasury’s share of U.S. 

credit markets remains fairly level.

 The share of total short-term 

Treasuries outstanding grew in the fourth quarter of CY 2005 as bills outstanding reversed a 2 quarter decline.

Percentage Breakdown of Nonfinancial Credit Mark

0%5%

10%15%20%25%30%35%40%

1995 1996 1997 1998 1999 2000 2001 2002 20

Residential Mortgages Treasuries Muni's 

Source: U.S. Federal Reserve Board of Governors Flow of Funds.

Outstanding Short-term Marketable Treasury Securities as a Perce

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 2000 

Calendar Quarters

Short-term Marketable Treasuries = Treasury bills and Treasury coupon securities with 1 year or lesMoney 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 rele
Office of Debt Management

Auction Release Time Performance 

Auction Release Times for May 2005 - April 2006

Data through April 27, 2006

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

05/02/05 05/25/05 06/20/05 07/14/05 08/09/05 09/06/05 09/28/05 10/25/05 11/15/05 12/08/05 01/09/06 01/31/06 02/27/06 0

(In Minutes and Seconds)

Target release time 

 No current quarter exceptions to Treasury’s 2 minute auction release times