April 13, 2012 / 4:10 PM / 6 years ago

U.S. asks bond dealers' views on financing needs

WASHINGTON, April 13 (Reuters) - The U.S. Treasury Department on Friday asked Wall Street for its views on the Treasury’s current auction schedule and whether it is compatible with economic and fiscal outlooks for 2012 and 2013.

The questions were contained in the Treasury’s quarterly refunding survey of primary government bond dealers. The Treasury is expected to meet with primary dealers on April 26-27 ahead of the department’s refunding announcement on May 2.

“Do you believe the current auction schedule is well-suited to meet Treasury’s expected financing needs?” the survey asked.

The survey also asked dealers to assess whether or not the Federal Reserve’s maturity extension program -- which involves the sale of shorter-term Treasury securities -- will have an impact on the market when it ends on June 30.

Primary dealers, which include Goldman Sachs Inc and JPMorgan Chase & Co, are the financial firms with special permission to bid directly on behalf of their clients at Treasury auctions.

Treasury also asked primary dealers to provide feedback on the increased usage of electronic trading platforms in the Treasury market. Officials wanted to know how the uptick has changed trading dynamics and liquidity.

A U.S. Treasury official said that the consideration of floating-rate notes were still being studied and no decisions had been made at this time. The comment period on the proposal ends next Wednesday.

In February, the Treasury Borrowing Advisory Committee had suggested that the department consider issuing floating rate notes -- a form of debt never before offered by the Treasury. Government-sponsored enterprises such as Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System are regular issuers of floating rate notes.

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