Bloomberg News

Treasury Asks Bond Dealers for Views on Floating-Rate Notes

October 14, 2011

(Updates with floating-rate notes in third paragraph.)

Oct. 14 (Bloomberg) -- The U.S. Treasury Department asked bond dealers for their newest fiscal and economic forecasts for 2012 and 2013 and for recommendations on how it could issue floating-rate notes.

The survey, released in a statement today, is for an Oct. 28 meeting between Treasury officials and Wall Street bond dealers in advance of next month’s quarterly auctions of notes and bonds.

The Treasury Borrowing Advisory Committee, which includes officials from Goldman Sachs Group Inc. and Morgan Stanley, suggested in February that the department consider issuing floating-rate notes. In the survey, the Treasury asks dealers to comment “on the optimal structure for such a product, how it would affect Treasury’s overall cost of borrowing and whether you expect robust market demand for such a product.”

The Treasury also asked dealers whether the current auction schedule is suited to meet U.S. financing needs.

The department said some bill auctions have closed with an interest rate of zero and bills have traded at negative rates in the secondary market.

The survey asks, “should Treasury consider allowing negative rate bidding in bill auctions?”

--Editors: Christopher Wellisz, Scott Lanman

To contact the reporter on this story: Ian Katz in Washington at

To contact the editor responsible for this story: Chris Wellisz at

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