[Federal Register Volume 77, Number 53 (Monday, March 19, 2012)]
[Notices]
[Pages 16116-16117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-6662]
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DEPARTMENT OF THE TREASURY
[Docket No. BPD-2012-001]
Public Input on the Development and Potential Issuance of
Treasury Floating Rate Notes
AGENCY: Office of the Assistant Secretary for Financial Markets,
Treasury.
ACTION: Notice and request for information.
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SUMMARY: The Secretary of the Treasury (``Secretary'') is authorized
under Chapter 31 of Title 31, United States Code, to issue United
States obligations and to offer them for sale under such terms and
conditions as the Secretary may prescribe. The Department of the
Treasury (``Treasury'') is requesting comments on the potential
issuance of a floating rate note. Treasury is particularly interested
in comments concerning the demand for the product, how the security
should be structured, its liquidity, and any operational issues that
should be considered relating to the issuance of this type of debt.
Treasury has not made a decision to issue floating rate notes. Treasury
will continue to weigh the relative merits of issuing floating rate
notes, and comments received as part of this Request for Information
will serve as valuable input into this decision.
DATES: Submit comments on or before April 18, 2012.
ADDRESSES: Comments may be submitted electronically through the Federal
eRulemaking Portal at http://www.regulations.gov, in accordance with
the instructions. Comments will be available at http://www.regulations.gov as submitted, unless modified for technical
reasons. Accordingly, your comments will not be edited to remove any
identifying or contact information. You may download this Request for
Information from http://www.regulations.gov or the Bureau of the Public
Debt's Web site at http://www.treasurydirect.gov. You may also send
paper comments to Department of the Treasury, Bureau of the Public
Debt, Government Securities Regulations Staff, 799 9th Street NW.,
Washington, DC 20239-0001. Comments received will be available for
public inspection and copying at the Treasury Department
[[Page 16117]]
Library, Main Treasury Building, 1500 Pennsylvania Avenue NW.,
Washington, DC 20220. To visit the library, call (202) 622-0990 for an
appointment. In general, comments received, including attachments and
other supporting materials, are part of the public record and are
available to the public. Do not submit any information in your comments
or supporting materials that you consider confidential or inappropriate
for public disclosure.
Responses should also include: (1) The data or rationale, including
examples, supporting any opinions or conclusions; (2) alternative
approaches and options that should be considered, if any; and, (3) any
specific comments regarding general terms and conditions for the sale
and issuance of floating rate notes.
FOR FURTHER INFORMATION CONTACT: Lori Santamorena, Executive Director;
Kurt Eidemiller, Associate Director; or Kevin Hawkins, Government
Securities Advisor; Department of the Treasury, Bureau of the Public
Debt, Government Securities Regulations Staff, (202) 504-3632.
SUPPLEMENTARY INFORMATION:
I. Background
Treasury continually seeks ways to minimize borrowing costs, better
manage its liability profile, enhance market liquidity, and expand the
investor base in Treasury securities. To help meet these objectives,
Treasury announced at its February 2012 Quarterly Refunding that it
continues to study the possibility of issuing floating rate notes
(FRNs), a security with a return that is indexed and periodically
reset. Examining alternative forms and structures of debt issuance is
consistent with Treasury's mission of financing the government at the
lowest cost over time. Treasury has discussed the issuance of FRNs with
the Treasury Borrowing Advisory Committee (TBAC), which is a federal
advisory committee sponsored by the Securities Industry and Financial
Markets Association (SIFMA), and with the primary dealers. These
discussions have provided a significant amount of constructive
feedback. However, prior to making a decision, Treasury is soliciting a
broader range of input from a variety of market participants on demand
for the product and its liquidity, as well as structural and
operational issues that Treasury should consider.
II. Solicitation for Comments
Commenters are invited to submit views on the following questions:
1. Would FRNs attract new investors into the Treasury market for a
sustained period of time?
2. Would a Treasury FRN help meet the investment needs of retail
and institutional investors?
3. How liquid would you expect FRNs to be in the secondary markets?
4. What is the ideal structure for a Treasury FRN?
a. What is the ideal final maturity for a Treasury FRN?
b. What are the pros and cons of using the following reference
rates for a Treasury FRN: Treasury bills, a Treasury general
collateral-based repurchase agreement (``repo'') rate, and the federal
funds effective rate? Are there any other reference rates that merit
consideration?
c. What would be the appropriate coupon payment frequency of a
Treasury FRN?
5. What changes to trading, settlement and accounting systems would
be needed to accommodate FRNs?
6. Are there any other operational issues that Treasury should be
aware of when deciding on whether to issue FRNs?
7. Given the above considerations, are FRNs a useful debt
management tool that Treasury should consider?
Mary J. Miller,
Assistant Secretary for Financial Markets.
[FR Doc. 2012-6662 Filed 3-15-12; 8:45 am]
BILLING CODE 4810-39-P