For the first time in about two and a half years, the U.S. Treasury Department has raised the size of medium- to long-term bond issuances for its quarterly auctions. The bid is likely to test dealer demand after Fitch Ratings downgraded the U.S. from the highest grade amid growing government borrowing needs.
Ministry of Finance on the 2ndannouncementThe ministry will issue 3-, 10- and 30-year bonds worth a total of $103 billion in next week’s auction, according to the report. The size of the issuance, which totaled $96 billion, was up from last year and slightly above most dealer expectations.
The increase in the size of the issuance highlights the growing need for borrowing by the U.S. government. Fitch has downgraded its long-term foreign currency issuer default rating (IDR) for the United States by one notch from AAA to AA+. Fitch expects financial conditions to deteriorate over the next three years.
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The Treasury Department also said the expansion in issuance is likely to continue well into 2024. “While these changes will provide significant progress towards matching our medium- to long-term borrowing needs with our bid sizes, they are likely to require incremental, but still larger, issuance sizes in the coming quarters,” the statement said. rice field.
Bloomberg TV report on Fitch downgrade
Source: Bloomberg
The extent to which medium- and long-term debt issuance expands in the future will depend on fiscal conditions and how long the Federal Reserve continues to reduce its bond portfolio, he said.
Here’s the breakdown of next week’s quarterly bidding:
August 8: 3-year note, $42 billion August 9: 10-year note, $38 billion August 10: 30-year note, $23 billion expected to raise approximately $19 billion in new funding
Original title:US Plans $103 Billion Debt Sale, as Issuance to Keep Rising (1)(excerpt)
(Adds and updates bidding details)
2023-08-02 12:46:40
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