Treasury Runs Out of Cash Again – Announces Surprise18-Day Bill

Courtesy of Lee Adler of the Wall Street Examiner

Ouch! The Treasury has run out of cash again and is floating another Cash Management Bill, this one and 18 day bill for $35 billion settling August 30. It will refund a $25 billion CMB expiring that day and add another $10 billion to the pot. That makes $45 bill in net new cash that the Treasury has raised via CMBs since August 15. The market did not expect this. The additional $10 billion settlement hits on Thursday.

I see no reasonable prospect that the Treasury will be able to redeem these rather than rolling them over, unless it issues $45 billion in new longer term paper. I’ve been covering this issue in the weekly Treasury Reports. Stay tuned.

CUSIP: 912796CY3
Term and Type: 18-Day Bill
Offering Amount: $35,000,000,000
Auction Date: 08/29/2012
Issue Date: 08/30/2012
Maturity Date: 09/17/2012
PDF version of the announcement
XML version of the announcement

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