2017 Economic Calendar
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2-Yr FRN Note Announcement  
 
Description of Offering
Offering Amount$15.0 B 
CUSIP Number9128282M1 
Auction DateJuly 26, 2017 
Issue (Settlement) DateJuly 31, 2017 
Maturity DateJuly 31, 2019 
Min Bid Amount$100 
Noncompetitive Bids11:00 a.m. ET 
Competitive Bids11:30 a.m. ET 
Definition
A FRN (floating rate note) is a security that has an interest payment that can change over time. As interest rates rise, the security's interest payments will increase. Similarly, as interest rates fall, the security's interest payments will decrease. The FRN is the first addition to the Treasury's offerings since inflation protected notes were introduced in 1997. Floating rate notes offer investors a chance to gain yield when interest rates rise and with short-term interest rates very low at the time of the introduction, they offer investors a low risk, high quality alternative to Treasury bills and their associated rollover costs.

For the Treasury, the notes will help it attract new investors and, as a funding substitute to T-bills, will help limit its short-term cash needs. The notes also limit rollover risk, that is the Treasury's dependence on bill holders to rollover their holdings with each new bill issue. But there is risk for the Treasury as substituting 2-year floating notes for short-term bills exposes it to a rise in interest rates, an increase that would increase its borrowing costs. Treasury FRNs will be indexed to the most recent 13-week Treasury bill auction High Rate, which is the highest accepted discount rate in a Treasury bill auction.  Why Investors Care
 

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