Floating rate notes : analysis of treasury's newest debt management security / Rosalyn Mercer, editor.

Format:

Book

Contributor:

Mercer, Rosalyn, editor.

Series:

American political, economic, and security issues series.

American Political, Economic, and Security Issues Series

Language:

English

Subjects (All):

United States. Department of the Treasury.

United States.

Government securities--United States.

Government securities.

Floating rate notes--United States.

Floating rate notes.

Debts, Public--United States.

Debts, Public.

Physical Description:

1 online resource (91 p.)

Place of Publication:

New York, [New York] : Nova Science Publishers, 2014.

Summary:

Issuing floating rate notes (FRN) is likely to help the Department of the Treasury (Treasury) meet its goals to borrow at the lowest cost over time, extend the average maturity of the debt portfolio, and increase demand for Treasury securities, but it also presents risks related to changes in interest rates. This book evaluates Treasury's rationale for introducing FRNs and identifies the demand for Treasury securities from a broad range of investors to assess whether changes would help Treasury meet its goals.

Contents:

FLOATING RATE NOTES ANALYSIS OF TREASURY'S NEWEST DEBT MANAGEMENT SECURITY ; FLOATING RATE NOTES ANALYSIS OF TREASURY'S NEWEST DEBT MANAGEMENT SECURITY ; Library of Congress Cataloging-in-Publication Data; Contents; Preface; Chapter 1 Debt Management: Floating Rate Notes Can Help Treasury Meet Borrowing Goals, but Additional Actions Are Needed to Help Manage Risk*; Why GAO Did This Study; What GAO Recommends; What GAO Found; Abbreviations; Background

Floating Rate Notes Are Likely to Help Treasury Borrow at the Lowest Cost over Time, Extend the Average Maturity, and Increase Demand, but They Also Present Certain Risks2-Year FRNs Are Likely to Cost Less than 2-Year Fixed-Rate Notes but Could Cost More or Less than Bills, and the Cost Will Vary by the Interest Rate Environment; Costs of 2-Year FRNs Vary Based on What Treasury Would Have Issued Instead, Investor Treatment of FRNs, and Interest Rate Environment; Technical Demand May Increase Savings to Treasury, While a Liquidity Premium May Increase Costs

Results of Initial FRN Auctions Were within the Range Estimated by Our ModelsMismatch between the FRN's Index Rate Maturity and Reset Frequency Poses Risk That Treasury Has Not Fully Analyzed; FRNs Can Help to Extend the Maturity of the Debt Portfolio, but They Make Treasury's Weighted Average Maturity an Incomplete Measure of Rollover Risk; FRNs Provide Treasury with Additional Flexibility in Its Debt Issuance; Market Participants Identified Opportunities for Treasury to Enhance Investor Input and Expand Product Offerings

Overall Treasury's Communication with Investors Is Strong, but Certain Sectors Said It Could be ImprovedSurvey Respondents Reported Interest Both in FRNs with Different Maturities and Other New Types of Treasury Securities; Conclusions; Recommendations for Executive Action; Agency Comments and Our Evaluation; Appendix I. Simulations of Floating Rate Note Costs; Estimating Spreads; Defining Interest Rate Environments; Estimating Interest Costs; Results of Simulations of FRN Costs by Volatility in Rates; Appendix II. Survey Scope and Methodology; End Notes; Chapter 2 How Treasury Issues Debt(

SummaryIntroduction; An Overview of Debt Management Practices; How Treasury Sells Debt; Auction Process; Marketable Securities; Treasury Bills; Treasury Notes; Treasury Bonds; Treasury Inflation-Protected Securities (TIPS); Nonmarketable Securities; Role of Federal Reserve and Primary Dealers; Other Purchasers of Treasury Securities; Secondary and Repurchase Markets; Managing Federal Financial Flows; How Much Debt is Outstanding?; Factors Affecting Supply and Demand for Treasury Securities; Yield Curve; Determining Maturity Mix; Current Economic Conditions; Budgetary Impacts

Constraints of the Debt Limit

Notes:

Includes index.

Description based on print version record.

ISBN:

1-63463-251-6