U.S. Treasury Borrowing
October - December 2002 January - March 2003

(Projected) (Actuals) (Projected)

Net Marketable Issuance* 76 83 110

Bills 21

Nominal Notes 55

IIS 7

Financing 76 83 110

Deficit Funding ** 109 118 116

Net Non-Marketable Financing 17 8 -3

Change in Cash Balance 16 28 8

Notes:

Starting Cash Balance 61 61 33

Ending Cash Balance 45 33 25

* If unchanged, current coupon issuance pattern would raise $208 billion in FY03.

** Includes budget results, direct loan activity, changes in accrued interest and checks outstanding and minor miscellaneous transactions.

Note: Dollars in billions; totals may not add due to rounding

Treasury Financing Requirements

Department of the Treasury

Office of Market Finance February 3, 2003-1

Borrowing modestly larger than expected

$ Billions
0

10

20

30

40

50

60

70

0

10

20

30

40

50

60

70

FY 2002

FY 2003

Treasury Daily Operating Cash Balance

Department of the Treasury

Office of Market Finance February 3, 2003-2

$Bil. $Bil.

Source: Daily Treasury Statement, data through January 29.

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Cash balance volatility declines
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Debt Held by the Public to GDP (%)

Surplus/Deficit % of GDP

'03

Percent Percent

Percent Percent

2

0

-2

-4

-6

-8

2

0

-2

-4

-6

-8

80

60

40

20

0

80

60

40

20

0

Financing needs low by historical standards

Surplus/Deficit and Debt to GDP

Department of the Treasury

Office of Market Finance February 3, 2003-3

Source: U.S. Government Budget for FY 2004 Budget Historical Tables 1.2 & 7.1.

Annual
1960 1965 1970 1975 1980 1985 1990 1995 2000

0

5,000

10,000

15,000

20,000

0

5,000

10,000

15,000

20,000

Nonfinancial Credit Market

Treasuries

$Bil. $Bil.

30

20

10

0

Percent Percent

30

20

10

0

Credit market share low and stable

Treasuries

Muni's

Corporates

Home Mortgages

Consumer Credit

Other

Department of the Treasury

Office of Market Finance

February 3, 2003-4

Domestic Nonfinancial Credit Market and Treasury Debt

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

Quarterly
1969 1973 1977 1981 1985 1989 1993 1997 2001

Treasury Bills as a Percentage of the Money Market

Quarterly

Department of the Treasury

Office of Market Finance February 3, 2003-5

Percent Percent

1

25

30

35

40

45

50

55

60

65

70

25

30

35

40

45

50

55

60

65

70

Treasury's share of money markets near historic lows

Source: U.S. Federal Reserve Board of Governors Flow of Funds statistical release Z.1.

1 Money market = Treasury bills, nonfinancial commercial paper and bankers acceptances.
0

50

100

150

200

250

300

350

0

50

100

150

200

250

300

350

Primary Dealer Trading Volume

Outright Transactions, 3-Month Moving Average

$Bil.

February 3, 2003-6

Department of the Treasury

Office of Market Finance

1995 1996 1997 1998 1999 2000 2001 2002 2003

Bills

Notes/Bonds

Agencies

MBS

Corp

$Bil.

1

Treasuries playing an important financial intermediation role

1 Data available beginning September 26, 2001. Source: Federal Reserve Bank of New York.
0

20

40

60

80

0

20

40

60

80

Maturity of issuance has been highly volatile

Months

February 3, 2003-7

Department of the Treasury

Office of Market Finance

Months

Average Maturity of Outstanding Privately Held

Constant-Issuance Maturity (6-month average)

Quarterly

Assumes the distribution of issuance in any given quarter is held constant going forward.

1

1

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

Maturity of Marketable Debt
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 0

50

100

150

200

250

300

350

400

450

500

550

0

50

100

150

200

250

300

350

400

450

500

550

$Bil.

Department of the Treasury

Office of Market Finance February 3, 2003-8

$Bil.

Calendar Year

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

1

Note: Where applicable, maturities represent first call date.

1 Issued or announced through January 31, 2003.

Outstanding Treasury Marketable Coupon Securities

Current coupon issuance tilted toward 2-year notes
Dec-61

Dec-62Dec-63Dec-64Dec-65Dec-66Dec-67Dec-68Dec-69Dec-70Dec-71Dec-72Dec-73Dec-74Dec-75Dec-76Dec-77Dec-78Dec-79Dec-80Dec-81Dec-82Dec-83Dec-84Dec-85Dec-86Dec-87Dec-88Dec-89Dec-90Dec-91Dec-92Dec-93Dec-94Dec-95Dec-96Dec-97Dec-98Dec-99Dec-00Dec-99Dec-00

-400

-200

0

200

400

600

800

1,000

-400

-200

0

200

400

600

800

1,000

Refinancing dominates new financing

Department of the Treasury

Office of Market Finance February 3, 2003-9

$Bil. $Bil.

1961 '64 '67 '76 '70 '73 '79 '82 '85 '88 '91 '94 '97 '00 '03

Quarterly Financial Obligations

(Deficit/Surplus)

Maturing Debt

Fiscal Balance

Maturing Debt Without 4-week Bills
0

2

4

6

8

10

0

2

4

6

8

10

Decreasing variance of auction release times

Data Through

January 31

Target Release Range

Department of the Treasury

BPD - Office of Financing February 3, 2003-10

 1

Feb-02 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-03

Note: Current Quarter Exceptions:

Auction Release Times

Min. Min.

for the 13-week bill auction that was inadvertently rejected. Failure to notice this error resulted in not being able to close and calculate the auction timely.

1. 10/28/02, 13- and 26-week bills, release time:1:07:49, the press release was delayed due to an operator error. A submitter sent a timely competitive bid

Minutes from Closing to Release

Current Quarter

(October 28 - January 31)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

0

5

10

15

20

25

30

35

40

45

0

5

10

15

20

25

30

35

40

45

Direct

Indirect

Bidders No trend in indirect bidding

February 3, 2003-11

1

2

1 Indirect bidders submit competitive bids through a direct bidder.

2

Department of the Treasury Direct bidders submit competitive bids for their own account.

BPD - Office of Financing

Bidders

2002 2003

Competitive Bidder Participation in Treasury Bill Auctions

Monthly Averages
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

0

10

20

30

40

50

60

70

80

0

10

20

30

40

50

60

70

80

Bidders

Treasury Inflation Indexed Securities attract more bidders

February 3, 2003-12

1 Indirect bidders submit competitive bids through a direct bidder.

2

Department of the Treasury Direct bidders submit competitive bids for their own account.

BPD - Office of Financing

Indirect Indirect

Direct Direct

Nominal TIIS

1

2

1

2

Bidders

2002 2003

Competitive Bidder Participation in Treasury Note Auctions

Monthly Averages
I II III IV I II III IV I II III IV I II III IV I II III IV

-200

-160

-120

-80

-40

0

40

80

120

-200

-160

-120

-80

-40

0

40

80

120

10.3

-97.9

-38.8

24.0

5.8

-113.8

-15.9

47.0

-20.1

-192.1

-47.7-26.1

17.8

-163.4

74.4

52.1

52.5

15.1

84.2

82.6

Treasury Quarterly Net Market Borrowing

$Bil.

Department of the Treasury

Office of Market Finance

$Bil.

February 3, 2003-A.1

1998 1999 2000 2001 2002

Bills

Coupons

2 - under 5 yrs

5 - 10 yrs

Over 10 yrs

Buybacks
I II III IV I II III IV I II III IV I II III IV I II III IV -15

-10

-5

0

5

10

15

-15

-10

-5

0

5

10

15

12.6 13.0

6.2

-0.1

-0.9

1.6

-6.9

-3.6

-8.0

-5.0

-10.1

-2.2 -1.4

-1.7

-10.6

0.8

-5.5

-0.1 -0.7

7.6

$Bil. $Bil.

Treasury Quarterly Net Borrowing from Nonmarketable Issues

February 3, 2003-A.2

Department of the Treasury

Office of Market Finance

State and Local Series

Foreign Series

Savings Bonds

1998 1999 2000 2001 2002
0

5

10

15

20

25

30

35

40

0

5

10

15

20

25

30

35

40

Foreign Holdings as a Percent of Total Privately Held Public Debt

Quarterly

Department of the Treasury

Office of Market Finance February 3, 2003-A.3

Percent Percent

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

 Benchmark revision

1

Estimated Foreign Holdings

Foreign and International Institutional Holdings at FRBNY 2

1 Source: Treasury Foreign Portfolio Investment Survey and monthly data collected under the Treasury International Capital reporting

Source: Federal Reserve Bank of New York statistical release H4.1. 2

system. Data through November 30, 2002. See http://www.treas.gov/tic/index.html.
November 31, 2002 December 31, 2001 December 31, 2000

As a % of As a % of As a % of As a % of As a % of As a % of

$ Billions Total Total $ Billions Total Total $ Billions Total Total

Country Foreign Private Foreign Private Foreign Private

Japan $361.9 31.3% 12.0% $317.9 30.2% 11.3% $ 317.7 30.7% 11.0%

China 96.8 8.4% 3.2% 78.6 7.5% 2.8% 60.3 5.8% 2.1%

United Kingdom 69.5 6.0% 2.3% 45.0 4.3% 1.6% 50.2 4.9% 1.7%

Caribbean Banking Centers 66.9 5.8% 2.2% 45.4 4.3% 1.6% 43.8 4.2% 1.5%

Hong Kong 49.6 4.3% 1.6% 47.7 4.5% 1.7% 38.6 3.7% 1.3%

Oil Exporters 47.3 4.1% 1.6% 48.9 4.6% 1.7% 49.9 4.8% 1.7%

Korea 42.8 3.7% 1.4% 32.8 3.1% 1.2% 29.6 2.9% 1.0%

Germany 40.0 3.5% 1.3% 47.8 4.5% 1.7% 49.0 4.7% 1.7%

Taiwan 34.7 3.0% 1.1% 35.3 3.4% 1.3% 33.4 3.2% 1.2%

Mexico 27.5 2.4% 0.9% 24.8 2.4% 0.9% 27.2 2.6% 0.9%

Belgium-Luxembourg 24.3 2.1% 0.8% 22.4 2.1% 0.8% 29.6 2.9% 1.0%

Switzerland 22.1 1.9% 0.7% 18.7 1.8% 0.7% 16.4 1.6% 0.6%

Italy 18.7 1.6% 0.6% 18.9 1.8% 0.7% 20.8 2.0% 0.7%

Singapore 18.1 1.6% 0.6% 20.0 1.9% 0.7% 27.9 2.7% 1.0%

Thailand 17.5 1.5% 0.6% 15.7 1.5% 0.6% 13.8 1.3% 0.5%

France 16.3 1.4% 0.5% 20.6 2.0% 0.7% 25.1 2.4% 0.9%

Spain 15.7 1.4% 0.5% 15.6 1.5% 0.6% 19.0 1.8% 0.7%

Canada 13.2 1.1% 0.4% 15.4 1.5% 0.5% 14.2 1.4% 0.5%

Other 172.9 15.0% 5.7% 181.6 17.2% 6.4% 167.7 16.2% 5.8%

Estimated

Foreign Total $1,155.8 100.0% 38.3% $1,053.1 100.0% 37.4% $1,034.2 100.0% 35.9%

Source: Treasury Foreign Portfolio Investment Survey and monthly data collected under the Treasury

International Capital reporting system.

Department of the Treasury

Office of Market Finance February 3, 2003-A.4

Major Foreign Holders of Treasury Securities
1994 1995 1996 1997 1998 1999 2000 2001 2002

0

20

40

60

80

0

20

40

60

80

100 100

Privately Held Treasury Marketable Debt

Percent Distribution By Maturity

1

Coupons

Calendar Year End Data

Department of the Treasury

Office of Market Finance February 3, 2003-A.5

18

29

12

26

17

Over 10 years

2-10 years

1-2 years

1 year & under

Bills

1 Privately held marketable debt excludes holdings of the Federal Reserve and

non-interest-bearing matured debt.

19

31

18

18

14

15

33

16

20

16

Percent Percent