November 2010 Quarterly Refunding Statement

The U.S. Department of the Treasury is offering $72 billion of Treasury securities to refund approximately $13.8 billion of privately held securities maturing on November 15, 2010. This will raise approximately $58.2 billion. The securities are: - A 3-year note in the amount of $32 billion, maturing November 15, 2013; - A 10-year note in the amount of $24 billion, maturing November 15, 2020; and - A 30-year bond in the amount of $16 billion, maturing November 15, 2040. The 3-year note will be auctioned on a yield basis at 1:00 p.m. EST on Monday, November 8, 2010. The 10-year note will be auctioned on a yield basis at 1:00 p.m. EST on Tuesday, November 9, 2010, and the 30-year bond will be auctioned on a yield basis at 1:00 p.m. EST on Wednesday, November 10, 2010. All of these auctions will settle on Monday, November 15, 2010. The balance of Treasury financing requirements will be met with the regular weekly bill auctions, the regular monthly nominal coupon security auctions, the November 10-year TIPS reopening auction and the January 10-year TIPS auction. Treasury may also issue cash management bills during the quarter. Projected Financing Needs In recent months Treasury has reduced coupon offering sizes in the front-to-intermediate sectors of the nominal coupon curve. In total, these cuts have reduced Treasury's annualized borrowing capacity by $328 billion. Based on current fiscal forecasts, coupon auction sizes are likely to remain steady over the coming quarter. Treasury will continue to monitor projected financing needs and make appropriate adjustments, as necessary. Treasury Inflation-Indexed Securities (TIPS) Over the past year Treasury has made changes to TIPS issuance to improve liquidity in the TIPS market. These changes have included increasing overall TIPS issuance, increasing the frequency of 10-year TIPS auctions, and replacing 20-year TIPS with 30-year TIPS. After extensive consultation with market participants, Treasury is adding a second reopening to each of its 5-year and 30-year TIPS offerings. Beginning in CY2011, the original-issue 5-year TIPS will be auctioned in April and reopening auctions will take place in August and December. Similarly, the original-issue 30-year TIPS will be auctioned in February with subsequent reopening auctions in June and October. As a result of these changes, Treasury will hold a TIPS auction in every month of the year. Beginning in January 2011, Treasury will regularly hold all TIPS auctions on the Thursday immediately preceding the end-of-month coupon auctions. This will help spread out auctions, provide a longer "when-issued" trading period and give TIPS their own auction week each month. As a result, 10-year TIPS auctions will settle on the last business day of the month, rather than the current practice of mid-month settlement, and settlement dates will be uniform for all TIPS auctions.