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Treasury also made clear it will move away from its current focus on Treasury bills that have helped raise urgent funds over the past six weeks in favor of spreading debt over a longer maturity structure.
“While the initial increases in financing related to the COVID-19 outbreak response were focused on Treasury bills, Treasury expects to begin to shift financing from bills to longer-dated tenors over the coming quarters,” Brian Smith, Treasury’s assistant secretary for federal finance, said in a statement.
“In light of the substantial increase in borrowing needs, Treasury plans to increase its long-term issuance as a prudent means of managing its maturity profile and limiting potential future issuance volatility,” he added.
In the statement, Treasury said it intends to increase auction sizes across all nominal coupon tenors over the May-to-July period, with the increases larger in the 7-year, 10-year, 20-year and 30-year categories.
It also plans to “modestly” increase auction sizes for floating-rate notes, but keep auction sizes for Treasury Inflation-Protected Securities unchanged.
On Monday, the department said it expects to borrow $2.999 trillion during the April-June quarter, five times larger than the previous single-quarter record set during the 2008 financial crisis.
Congress has appropriated nearly $3 trillion in recent weeks as it seeks to stem the economic harm on businesses and households from widespread business shutdowns implemented to reduce the spread of the coronavirus.
As previously flagged, Treasury will offer a 20-year bond, in an initial offering size of $20 billion, with the first auction taking place on May 20, 2020.
The department also said it is offering $96 billion of Treasury securities to refund approximately $57 billion of privately-held Treasury notes and bonds maturing on May 15, 2020.
Treasury’s previous record for borrowing for a full fiscal year was $1.8 trillion in 2009.
