Dow Jones writes "​US Treasury Whets Appetite For Potential New Notes". It says, "The U.​S. government is expected to add a new type of bond to its fund-​raising repertoire in the not-​so-​distant future, exciting some money-​market-​fund managers about the extra slice of yield and diversity the instruments likely will offer. The Treasury Department'​s latest refunding release showed its advisory committee unanimously recommended including floating-​rate notes on the menu of bond securities the government routinely auctions off. Floating-​rate notes pay buyers a specific premium in addition to the fluctuating rate of a given index, such as the Federal Funds rate. A final decision on offering these notes is expected in May. Bill Irving, portfolio manager for Fidelity'​s Government Income fund, said the investment community was somewhat surprised the notes are already "​pretty much a done deal," adding, "for money-​market fund investors, it'​ll be an attractive way to pick up some incremental yield." In the report, the committee priced hypothetical two-​year floating rate notes at the three-​month bill yield plus eight basis points.... If the government ends up offering these notes maturing in two years or less, demand will most likely come from money-​market funds, especially the ones that are only allowed to hold government paper. In general, these super-​conservative funds are stuck loading up on U.​S. T-​bills that yield next to nothing after having to pare back exposure from European bank debt last year."

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