Bloomberg on Treasury FRN Debut
Bloomberg writes "Floating Notes Debut in U.S as Cash Chases Fewer Securities". It says, "The U.S. Treasury Department's floating-rate notes may generate strong investor demand given a scarcity of money-market securities and a looming debt limit that's accelerating a decline in bill supply. Floaters would be the Treasury's first new security in 17 years. Details of the inaugural sale of the two-year notes Jan. 29 will be announced tomorrow even as legislation on the nation's borrowing limit causes the Treasury to scale back on bill sales and as dealers reduce activity in the repurchase agreement market." Citi's Andrew Hollenhorst comments, "With money-market mutual fund assets at the highest in the last few years and supply at relatively low levels, there is more cash chasing less securities. There is more cash now in the money funds and less investable assets on the supply side -- both of which should support demand at the Treasury's auction this month." See also, EU's Committee on Economic and Monetary Affairs "on the proposal for a regulation of the European Parliament and of the Council on Money Market Funds".
