Why aren't Treasury bill auction reopenings marked as reopenings on the Treasury Auction Schedule?
Why aren't Treasury bill auction reopenings marked as reopenings on the Treasury Auction Schedule?
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Franck Dernoncourt · External communityPost link
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Author: Franck Dernoncourt
Original post: https://money.stackexchange.com/questions/155861
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Let's consider on the 13-week bill whose auction date is Monday, March 13, 2023 on
Treasury Tentative Auction Schedule
. It's not marked as a reopening on the Treasury Tentative Auction Schedule (no
R
in the reopening column):
However, on my broker's website, the 13-week bill seems to be a reopening, since it's actually a 52-week bill (CUSIP:
912796X53
):
Why aren't Treasury bill auction reopenings marked as reopenings on the Treasury Auction Schedule? I feel I may have misunderstood something.
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littleadv · External communityPost link
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Author: littleadv
Original post: https://money.stackexchange.com/a/155862
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Treasury bills have no reopenings. See
here
:
Note: Bills have no reopenings. Instead, when needed, we auction short-term Cash Management Bills. (See the page about Bills).
Edit: your brokerage doesn't seem to say that this is a reopening, so I'm not sure why you even thought that.
You cannot participate in the Treasury offering of CMBs, they're only open for institutional investors. By the time they hit the secondary market - they're indistinguishable from any other treasury with the same maturity date (hence the same CUSIP).
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Morrison Chang · External communityPost link
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Author: Morrison Chang
Original post: https://money.stackexchange.com/a/155863
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Adaptation: HTML converted to plain text; contact email addresses removed.
As linked to by @littleadv, Treasury Bills aren't reopened.
From the
Federal Registry July 28, 2004, Part IV, Department of the Treasury, Fiscal Service, 31 CFR Part 356
Sale and Issue of Marketable Book-Entry
Treasury Bills, Notes, and Bonds—Plain
Language Uniform Offering Circular; Final
Rule
https://www.govinfo.gov/content/pkg/FR-2004-07-28/pdf/04-17012.pdf
§ 356.5 What types of securities does the
Treasury auction?
We offer securities under this part
exclusively in book-entry form and as
direct obligations of the United States
issued under Chapter 31 of Title 31 of
the United States Code. The securities
are subject to the terms and conditions
in this part, the regulations governing
book-entry Treasury bills, notes, and
bonds (31 CFR Part 357), and the
auction announcements.
When we issue
additional securities with the same
CUSIP number as outstanding
securities, we consider them to be the
same securities as the outstanding
securities.
(a) Treasury bills.
(1) Are issued at a discount;
(2) Are redeemed at their par amount
at maturity; and
(3) Have maturities of not more than
one year.
...
So what is going on with the CUSIP?
Checking the Treasury Direct site:
https://www.treasurydirect.gov/auctions/auction-query/?cusip=912796X53
The CUSIP
912796X53
as of EOD 2023-03-13 has 3 Bills with the same maturity date:
CUSIP
Security Type
Security Term
Auction Date
Issue Date
Maturity Date
Price per $100
912796X53
Bill
13-Week
03/13/2023
03/16/2023
06/15/2023
98.799306
912796X53
Bill
26-Week
12/12/2022
12/15/2022
06/15/2023
97.659278
912796X53
Bill
52-Week
06/14/2022
06/16/2022
06/15/2023
96.946444
As all Bills are issued at discount to par, it may be better to think of the CUSIP as marking the maturity date for all short term Treasury Bill/auction/non-auction obligations which are due on that date.
Logically if you transacted on a $10,000 USD 52-week Bill maturing on 06/15/2023 at the same date/time as the auction for the 13-week Bill maturing on 06/15/2023, the par value of $10,000 USD doesn't change, only the price/discount value would change matching the 13-week Bill auction discount. The seller capturing the increase in price from the original 52-week Bill issue date.
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Quoted from Forex.com.bd-Editorial External answer — Personal Finance Stack Exchange Author: Morrison Chang Source score (net votes, not local likes): 4 Original post: https://money.stackexchange.com/a/155863 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. As linked to by @littleadv, Treasury Bills aren't reopened. From the Federal Registry July 28, 2004, Part IV, Department of the Treasury, Fiscal Service, 31 CFR Part 356 Sale and Issue of Marketable Book-Entry Treasury Bills, Notes, and Bonds—Plain Language Uniform Offering Circular; Final Rule https://www.govinfo.gov/content/pkg/FR-2004-07-28/pdf/04-17012.pdf § 356.5 What types of securities does the Treasury auction? We offer securities under this part exclusively in book-entry form and as direct obligations of the United States issued under Chapter 31 of Title 31 of the United States Code. The securities are subject to the terms and conditions in this part, the regulations governing book-entry Treasury bills, notes, and bonds (31 CFR Part 357), and the auction announcements. When we issue additional securities with the same CUSIP number as outstanding securities, we consider them to be the same securities as the outstanding securities. (a) Treasury bills. (1) Are issued at a discount; (2) Are redeemed at their par amount at maturity; and (3) Have maturities of not more than one year. ... So what is going on with the CUSIP? Checking the Treasury Direct site: https://www.treasurydirect.gov/auctions/auction-query/?cusip=912796X53 The CUSIP 912796X53 as of EOD 2023-03-13 has 3 Bills with the same maturity date: CUSIP Security Type Security Term Auction Date Issue Date Maturity Date Price per $100 912796X53 Bill 13-Week 03/13/2023 03/16/2023 06/15/2023 98.799306 912796X53 Bill 26-Week 12/12/2022 12/15/2022 06/15/2023 97.659278 912796X53 Bill 52-Week 06/14/2022 06/16/2022 06/15/2023 96.946444 As all Bills are issued at discount to par, it may be better to think of the CUSIP as marking the maturity date for all short term Treasury Bill/auction/non-auction obligations which are due on that date. Logically if you transacted on a $10,000 USD 52-week Bill maturing on 06/15/2023 at the same date/time as the auction for the 13-week Bill maturing on 06/15/2023, the par value of $10,000 USD doesn't change, only the price/discount value would change matching the 13-week Bill auction discount. The seller capturing the increase in price from the original 52-week Bill issue date.
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