[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