US Treasury: rpt-1983-q1-4

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REPORT

TOTHE

SECRFTARY

OF

THE TREASURY

FROM

THE

U

,S,

GOVERN.VE&T

AND

FEDERAL AGENCTE,SSECURITIFS COMKI??TEE

OF

THE

PCGLIC

SECL'RITIFS

ASSOCIATION

Mr,

Secretary:Your Cornnittee bas

net

to

review an*

make

reconnendatiinnsconcerninq

Treasury

finance durinq

the

first quarter

of

1903.

117

c~i"nir:itx~

:!..f?

firmnrinij

sriiedulf-.

for

t~F:4s

rilartfr

and

i-ftr2,r.

reviewin;.

2

pro-forr;,?

financinq

s::h~c?i.:lr:

for

r.kjc:

Cetonc?

qc1

tcr

we

concl

i!!ri

!-hat.

p?st

financinq prcact:icec

an?

scl:~;iuleii

Lss.!i!s

are

suffiricnt

kc>

r:cetyour

needs,

G?e

discur:setl

tile

pr,s=lbility

of

cxpr:i?inq .;ither

trhc

four

or

five

year

note

cSfei:inqc

into

nor'ii:iy cycles.

I?e

concltided tirt?t

this

actjon

w:s

nct

new3er;

at

ti-tis

tine

but

believe

i.l

nay

tre1.S

I-c

needed

i,s

vi

r,ioqress

into

tl-c

third cnlr~dsr uarter-

Thc

Ccmnitter

bc:!

i::veri

tfiit

tt-.?

si7e

of

in?iViilrlal

i

SSUC-s

~OII??

e

incr.(iil~-iiil

v

t8~s.i

a::,

~;<;?sil~l(~

r?f.ore

the freqccnncy

cjf

offeri

~cl?;

i.s

i,~;cr<?asc:<!

Irn

ncltcx?

tbz

sc.vcr;i?

otrart

err

aqr:

hrc

in

3

t

then

be1

ieve-7

were

the

outsir3.r

1

irii

ts

for.

the

size

of

vat-ioils

ssiiis

and in all cases these

limits

have been exceeded

hy

a substantialperceptage, Wealso would note the

beneficial

effects of

the

two week breathinq

spell

created hy the nuarter-end hunchinq of

new

issues into

a

"mini-refunding"

week.

As

we exanined the pro-form financing schedules for thefirst half of 1983, howevrr,

we

were disturbed hy the relativelvhigh yroportion

of

rioney raised

in

the hill mrket,

We

attenI?teiito ease the situation sonewhat. hv increasinq amounts of lonqerhills

anid

wou1i1

urye Treasury whenever possible to reduce hillofferinijs

if

financinq needs fail short of projections. TheComcittee also discussed a potential reduction in investor denan6for hills due

to

lower

interest

rates

am?

the advent of thenew money narket accounts at financial institutions,

TSe

Cornnittee continues

to

feel that debt extension andthe fosterinq

of

an upwarij slopinq yield curve should he priniiry

tenets

of Trrasurv debt ~ina~enenkolic-.

m5.:

hillion

10

veal-

cotes to naturc 2/15/93

Shoiild Treasury opt for

a

smaller refunding, the Committee'spreference by a vote

of

15

-

8

would he to reduce the lonq kond

by

$250

nillioi. and the three year note by $500 nillion, Themincritv woi!Td reiiuce the ten year note hy $500 pillion, Icilvinqthe three year note

issue

size at $6-5 billion,

In

regard to the lonq hond cfferinq, the Cor-tittee

voted

17

to

6 to reopen the 11/15/12 issue feeling

it

desirak!e

to

reopen

issuer

rather than

add

further clutter to the already

lonn

list

of

Trcas!!ry issues, The Connittee reconmends theuscal scheduli. of offerin? dates and that all isrues

be

soli3

at

auct.ion, The Coilnittee believes that the reopened long bond

shw~ld

-e

sold under

the

yield ailction technique finding

tne

present method of dollar price hiddin4 highly cumber,

2

one

.

Financina in

the

Balance of the Quarter

-

Appende~'

io

this report are schedules containinq theCoilnittee fin?r!cinri I-(?commendations

for

the halano?

of

the!quarter.

Tic

ri:cor~.r?nciations fo!l0+7 past patterns of Treasuryfinanci~?

m?

utilizi!

cas!,

manaccment hills

a::

ti'<! ba3anci.

wheel

if

nee??

over-

or

:.inder-stloot projections.

A

similar

sci'e6r!lr

is

-

ttric!-cx' for the

scccwi

q~arter.

1;

i

G

.

T

V:

or

Cha irmn

of 00

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