Treasury Department to sell $112 billion in bonds to deal with debt load

Doug Cunningham
·2 min read
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UPI
The U.S. Treasury Department Wednesday said it will sell $112 billion in bonds in order to finance intermediate and longterm debt. Treasury Secretary Janet Yellen pictured in East Room of White House Sept. 23. File Pool Photo by Julia Nikhinson/CNP

Nov. 1 (UPI) -- The U.S. Treasury Department on Wednesday announced bond auctions in a move to handle debt.

The Treasury said it would launch sales of $112 billion of bonds in order to re-finance $102.2 billion of privately held Treasury bonds maturing Nov. 15, increasing bond auction debt sales November through January 2024 to manage intermediate to long-term debt.

"Based on projected intermediate- to long-term borrowing needs, Treasury intends to continue gradually increasing coupon auction sizes in the upcoming November 2023 to January 2024 quarter," the statement said. "As these changes will make substantial progress towards aligning auction sizes with projected borrowing needs, Treasury anticipates that one additional quarter of increases to coupon auction sizes will likely be needed beyond the increases announced today."

The bond auctions will be for a 3-year note of $48 billion maturing Nov. 15, 2026, a 10-year $40 billion note maturing Nov. 15, 2033 and a 30-year $24 billion bond maturing Nov. 15, 2053.

The Treasury Department statement said following the sale of these notes, it will increase the auction size of different bonds through the end of January.

"Treasury plans to increase the auction sizes of the 2- and 5-year by $3 billion per month, the 3-year by $2 billion per month, and the 7-year by $1 billion per month. As a result, the auction sizes of the 2-, 3-, 5-, and 7-year will increase by $9 billion, $6 billion, $9 billion, and $3 billion, respectively, by the end of January 2024," the statement said.

These adjustments are being made as Treasury bond yields are at the highest levels since 2007, a sign of concern in financial markets about high interest rate borrowing damage to the economy.

Earlier this week the Treasury Department said it needs to borrow $776 billion this quarter and $816 billion in the first quarter of 2024. These bond auctions help facilitate the borrowing.