U.S.

Treasury Borrowing

Treasury Financing Requirements
($ Billions) January - March 2003
(Projected) (Actuals)

April - June 2003
(Projected)

Net Marketable Issuance* Bills Nominal Notes IIS Bonds (20-yr) Financing Deficit Funding ** Compensating Balances Net Non-Marketable Financing Change in Cash Balance

110

111 66 42 6 -3

79

110 116 -3 8

111 143 14 -2 20

79 23 -18 -5 -32

Notes: Starting Cash Balance Ending Cash Balance 33 25 33 13 13 45

* Previously released coupon issuance pattern would raise $214 billion in FY03 ** Includes budget results, direct loan activity, changes in accrued interest and checks outstanding and minor miscellaneous transactions. Note: Totals may not add due to rounding Department of the Treasury Office of Market Finance April 28, 2003

February Base Case Issuance *

May Base Case Issuance *

Security Bills 2-year 3-year 5-year 5-year (r ) 10-year IIS

27 24 18 6

-

27 20 18 16 18 9

Amount Raised FY2003 FY2004

214 111

277 246

* Note: Base case issuance is purely for illustrative purposes assuming no change in issuance going forward. Does not necessarily represent Treasury's intended issuance pattern.

MATURITY PROFILE
Outstanding Treasury Marketable Coupon Securities $Bil. 800 Actual Data (Projected data are shaded)
Fourth Quarter Third Quarter Second Quarter
1

$Bil. 800

700

700

600

First Quarter

600

500

500

400

400

300

300

200

200

100

100

0

2003

2004

2005

2006

2007 2008 Calendar Year

2009

2010

2011

2012

0

Note: Where applicable, maturities represent first call date. 1 Issued or announced through April 25, 2003.
Department of the Treasury Office of Market Finance

AVERAGE MATURITY OF TOTAL OUTSTANDING MARKETABLE DEBT AND 1 1-YEAR MOVING AVERAGE OF CONSTANT ISSUANCE MEASURE
100 Months 100 Months

90

90

80

80

70

70

60
AVERAGE MATURITY

60

50

50

40

40

30
CONSTANT ISSUANCE MEASURE

30

20 1980

20 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

1/ The constant issuance measure is the ultimate average maturity achieved if nominal issuance in any given quarter is held constant going forward.

AVERAGE MATURITY OF ISSUANCE FROM PREVIOUS 3 AND 5 YEARS
Months 65

1

65 Months

60

60

55 Previous 5 Years 50

55

50

45 Previous 3 Years 40

45

40

35

35

30

30

25

25

20 1985

20 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

1/ The average maturity measure includes securities issued in the previous 3 or 5 years and still outstanding at the end of those rolling periods.

$ billions 600 500 400

FINANCING RESIDUALS GIVEN CURRENT ISSUANCE

$ billions 600

Deficits plus 1 St. Dev.

500 400

Deficit Forecasts (FY04 Budget) 300 200 100 0 -100 -200 -300 -400 2003 2004 2005 Fiscal Year 2006 2007 2008 300 200 100 0 -100 -200 -300 -400

Deficits minus 1 St. Dev.

FINANCING RESIDUALS GIVEN CURRENT ISSUANCE
$ billions 900 800 Deficits plus 2 St. Dev. 700 600 500 400 300 200 100 0 2003 2004 2005 2006 Fiscal Year 2007 2008 Deficits plus 1 St. Dev. 700 600 500 400 300 200 100 0 $ billions 900 800

Deficit Forecasts (FY04 Budget)

Expanded Schedule Would Be Sustainable
Security
Bills 2-year 3-year 5-year (r ) 5-year (m ) 10-year 10-year (r ) IIS

Announced 27 20 18/16

Alternative 22 18

15

18

16/10 9

6/9

BILLS AS A PERCENTAGE OF MARKETABLE DEBT AND DEFICIT AS A PERCENTAGE OF GDP1
3% Deficit/GDP 31% Bills/Debt

2%

29%

1% 27% 0% 25%

-1%

-2%

23%

-3% 21% -4% 19% Deficit/GDP -6% 1985 1987 1989 3-Yr/Reopen 5s 1991 1993 1995 3-Yr/Monthly 5s/Reopen 10s 17% 1997 1999 2001 2003 2005 2007

-5%

1/ The projected deficits as a percentage of GDP for 2003 to 2008 are from Administration's FY04 Budget.

DAILY PRIMARY DEALER TRADING VOLUMES
3-MONTH MOVING AVERAGES
400 Nominal Volume ($billions) 3.5 TIIS Volume ($billions)

350

3.0

300

2.5

250 NOMINAL NOTES/BONDS TIIS NOTES/BONDS 200

2.0

1.5

150

1.0

100 Apr-98

0.5 Sep-98 Feb-99 Jul-99 Dec-99 May-00 Oct-00 Mar-01 Aug-01 Jan-02 Jun-02 Nov-02

TURNOVER RATIOS FOR NOMINAL AND INFLATION-INDEXED TREASURIES
3-MONTH MOVING AVERAGES
20% Nominal Volume/Outstanding 18%

1

TIIS 3.0% Volume/Outstanding

2.5% 16%

NOMINAL NOTES/BONDS
14% 2.0%

TIIS NOTES/BONDS
12% 1.5%

10%

8% 1.0% 6%

4% Apr-98

0.5% Sep-98 Feb-99 Jul-99 Dec-99 May-00 Oct-00 Mar-01 Aug-01 Jan-02 Jun-02 Nov-02

1/ Average daily primary dealer trading volume divided by outstanding amount.

PRIMARY DEALER TIIS POSITIONS AS A PERCENTAGE OF OUTSTANDING TIIS
4.5%

3-MONTH MOVING AVERAGE

4.5%

4.0%

4.0%

3.5%

3.5%

3.0%

3.0%

2.5%

2.5%

2.0%

2.0%

1.5%

1.5%

1.0%

1.0%

0.5% Apr-98

0.5% Sep-98 Feb-99 Jul-99 Dec-99 May-00 Oct-00 Mar-01 Aug-01 Jan-02 Jun-02 Nov-02