Quarterly Refunding Charts

May 2, 2005

Office of Debt Management
2

Current Financing

• FY 2005 Q3 and Q4 Outlook:

– Estimated net marketable paydown of $42 billion this q

and net marketable borrowing of $103 billion next qua

• The Q3 estimated paydown is $54 billion less than we expe

January
3

• Non-marketable financing (SLGS) 

was higher than expected.

• Financing broadly distributed across 

bills, notes and TIPS.

• April individual tax receipts were 

greater than anticipated.

• $22.5 billion end of March balance.

 Treasury Financing Requirements

($ Billions)

 (Projected) (Actuals) 

Deficit Funding (Def + / Surplus -) 178 177 

Means of Financing

Change in Cash Balance 15 2 Net Non-Marketable Financing 5 17 Net Marketable Financing 147 144 Other* 11 14 

Net Marketable Financing 147 144 

Bills 56Nominal Notes 70TIPS 21Bonds -2

Notes:Starting Cash Balance 25 25 Ending Cash Balance 10 22 

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

 January - March 2005 

Treasury D aily O perating C ash B ala

0

1 02 03 04 05 06 07 08 09 0

Oct Nov Dec Jan Feb Mar Apr May Jun 

$ billions

FY 2003

FY 2004

FY 2005

N ote: D at
4

• Financing needs continue to be met 

by net new issuance across the nominal and TIPS curves.

• Small pay downs in 2-yr notes and 

nominal bonds.

• Record net new cash raised in State 

and Local Govt. Series (SLGS) issuance. 

Treasury Quarterly Net Market Borrowing

Calendar Quarter

52.1

52.5

15.1

82.6 60.3 81.5

-163.4

74.4

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 

$ billions

Buybacks

Over 10 years

5-10 years

2-under 5 years

Bills

Treasury Quarterly Net Borrowing from Nonma

 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

-15-10

-5

05

101520

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

$billions

State and LocalGovt. Series

Savings Bonds

Foreign Series
5

• Forecasts for fiscal 

improvement remain intact.

• At current coupon levels bill 

issuance rises in FY 2009 due to increased rollover, despite declining deficits.

Projected Net Marketable Borrowing and Hypothetical Bill 

If Coupon Auction Sizes Held Constant

05

1015202530354045

2005 2006 2007 2008 2

A verage Announced 

Auction Size $ Billions

4-week

13-week

26-week

A ssum es O M B's FY 2006 Budget deficit projections (except internal Treasury estim ate used for FY 05) and courecently announced amounts. Bill issuance sizes are shown in fixed shares to m eet residual financing needs.

Net Marketable Borrowing (RHS)

Drivers of Financing Needs 

-5

05

1015202530

1960 1965 1970 1975 1979 1984 1989 1994 

Percentage of GDP

Outlays

Revenue

GDP Gro

Net Intere

SOURCE: OMB Budget FY 2006

AvDi
6

• Coupon sizes show manageable 

growth under budget deficit projection and constant bill issuance.

Projected Net Marketable Borrowing and Hypothet

If Bill Issuance held Constant at FY 2005 Lev

05

1015202530354045

2005 2006 2007 2008 

Announced 

auction sizes 

$ billions

BILLS 2-YEAR 3-YEAR 5-YEAR 10-YEAR 5-YEAR TIPS 

Net Marketable Borrowing (RHS)

* *For bills, the average auction size equals the amount outstanding at the end of the fiscal year divided  (i.e., 4 1-month auctions, 13 3-month auctions, plus 26 6-month auctions).
7

Debt Portfolio

Assuming coupon levels held constant and new budget projecti• Average maturity of issuance rises on 20-year TIPS issuance• Maturity of total outstanding drops from around 4.5 years t

4 years over the next 5 years

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

reach nearly 63%
8

• The combination of continued 

residual bill financing and maturing bonds results in the decline of the average maturity of 

debt outstanding.

• Bills as a percentage of total 

annual issuance are projected to increase.

Percentage Breakdown of Annual Is

0%

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

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 

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

Projections based on OMB's FY 2006 Budget (except internal Treasury estimate used for FY05) anmost recently announced amounts. Residual amounts financed with bills.

DEBT MATURITY MEASURES 

2030405060708090

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

months

Average Maturity of Issuance

Average Maturity 

1/ The average maturity of issuance is the ultimate average maturity achieved if coupon issuance in any given quarter of financing needs are met with changes in bill issuance. (4 quarter moving average).

As of March 31, 2005

Assumptions: FY06 OMB Budget (except internal Treasury estimate used for FY05) and coupon issuance maintained at current levels.
9

• 2- and 3- year notes outstanding 

are expected to temporarily exceed bills outstanding at the end of FY 2005.

• TIPS growth continues.• If residuals are financed with 

bills, then maturing debt with 1-3 years is increasing, consistent with declining average maturity.

Distribution of Marketable Debt Outstanding b

0%5%

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

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

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

Projections based on OMB's FY 2006 Budget (except internal Treasury estimate used for FY05) and asmost recently announced amounts. Residual amounts financed with bills. 

Percentage of Debt Maturing in Next 12 to 

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

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 200

Maturing in 12 Months

Maturing in 24 Months

Maturing in 36 Months

Projections based on OMB's FY 2006 Budget (except internal Treasury estimate used for FY05sizes remain at most recently announced amounts. Residual amounts financed with bills.
10

• On a net basis 2- and 3-year notes 

are expected to provide minimal new cash after FY 2006.

Treasury Annual Net Market Borrow

-300-200-100

0

100200300400500

1998 1999 2000 2001 2002 2003 2004 2005 2006 20

$ Billions

Buybacks

over 10 years

5-10 years

2-under 5 years

Bills

Projections are based on FY 2006 OMB's Budget (except internal Treasury estimate used for FY05) remain at most recently announced amounts. Residual amounts financed with bills.

Projected
11

Uncertainty

• FY 2006 forecast shows modestly larger residual financing 

from 2006-2010

• FY 2005 residual financing need has fallen due to improved 

and record SLGS issuance
12

 Primary dealer estimates 

have risen slightly.

 FY 2005 residual has 

declined due to stronger than expected receipts and net SLGS issuance.

Financing R esiduals G iven C urrent Issuance C alenda

Assum es current coupon issuance pattern and issuance am ount-- W eekly bill issuance at le

outstanding F Y $ am ounts equal to Septem ber 30, 2004 total outstand

-300-200-100

0

100200300400500600700

2005 2006 2007 2008 20

Fiscal Y ears

$ billions

N et financing im plied by FY 06 O M B 

B udget deficit forecast

N et financing plus average absolute 

error in O M B estim ate

N et financing

m inus avg. absolute error in O M B est.

B ars indicate estim ated change in financing required in given year for different deficit outcom es

N ote: F Y 2 005 N et F inancing a m oun t is an internal T reasury estim ate.

N o te: A verage h istorical erro rs w ere estim ated w ith a lin ear least-squ ares regression using O M B 's bu dget forecasts sin ce the 1 98 9 B

 and the M SR since 1998.

Primary Dealers 

Current: 382 

Range based on average absolute error 329-435 

Estimates as of: April 28, 05 

Note: Ranges based on Errors from 1997-2004 

FY 05 Deficit Estimates 

($ B
13

Capital Markets

• Foreign holdings of Treasury debt continue at historical hig

comparable to foreign holdings of other G-7 countries

• Treasuries represent a stable proportion of the U.S. credit m
14

• Foreign holdings growth has 

stabilized near 53 percent of privately held debt.

• Non-resident participation in U. S.

Treasury market comparable to 

some G-7 government debt markets.

0 %

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

1998 1999 2000 2001 2002 

Canada U K France G erm 

Japan Italy U.S. 

N O N -R ESID EN T PA R TIC IPA T

IN G -7 G O VER N M EN T B O N D M A 

S ources: C anadian M O F , U K D M O , U .S . T IC , F rench T resor, B undesbank, Japanese M O F w ebscalculations. D ata for the U K and G erm any are through Q 3 2004.

Foreign Holdings as a Percent of Total Privately Held P

0%

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

1993 1994 1995 1996 1997 1998 1999 2000 2001 . 

Calendar Year

Percent

Estimated foreign holdings as % of private. 2/

Foreign and International Institutional Holdings atFRBNY as % of private. 3/

* 

Benchmark Revisions

1/ Privately held debt excludes holdings of the Federal Reserve.2/ Data through Feb. 28, 2005. See www.treas.gov/tic/indec.html.3/ Source: Federal Reserve Bank of NY statistical release H4.1.
15

• U.S. debt levels compare favorably 

to other G-7 countries.

• Treasury share of U.S. credit 

markets remains stable.

Percentage Breakdow n of Nonfinancial Cred

0 %5 %

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

1995 1996 1997 1998 1999 2000 2001 200

Residential M ortgages O ther M ortgages Treasuries M uni's Corporate

Source: U.S. Federal Reserve Board of G overnors Flow of Funds.

U.S. Debt Compared to the G

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20

U.S. Net General Government Debt

G7 less US Median Net GeneralGovernment Debt

G7 less US Average Net GeneralGovernment Debt

SOURC

Net debt is federal, state and municipal government debt held by the public. (That is, it is net of claims of government entities on each other). Such data are not always comparable across countries.

Estimated
16

• Treasury share of U.S. money 

markets remains below 20-year average.

• Dealer net short in TIPS near 

all-time high.

Outstanding Short-term Marketable Treasury Securities as a P

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 

Calendar Quarters

Short-term Marketable Treasuries = Treasury bills and Treasury coupon securities with 1 year o

Money 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 statistica

Net Primary Dealer Positions in Tre

-3-2-1

0123456

Feb-01 Apr-01 Jun-01 Aug-01 Oct-01 Dec-01 Feb-02 Apr-02 Jun-02 Aug-02 Oct-02 Dec-02 Feb-03 Apr-03 Jun-03 Aug-03 Oct-03 Dec-03 F

TIPS 

($ billions)

TIPS (LHS)

TIPS auctions

Nominal Treasuries (RHS)

no

TIPS zero line

Source: NY Fed

TIPS Auction Weeks
17

Auction Release Time Performanc

Current quarter exceptions to Treasury’s 2 minute auction release tim

2/7/05 – 13-week Bill: An XML failure resulted in manual typing of results from the PDF ver

Bureau of Public Debt's website.

Auction Release Times for May 2004 - April 2005

Data through April 27, 2005

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

5/3/04 6/2/04 7/6/04 8/3/04 9/7/04 10/5/04 11/8/04 12/6/04 1/10/05 2/8/05 3

(In Minutes and Seconds)

**

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

Target release time range