MNI UST Issuance Deep Dive: Mar 2025

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February Refunding: Guidance Shift And Maturity Extension To Wait

There was no change to guidance on future issuance in Treasury’s quarterly Refunding policy statement on Feb 5, a modest dovish surprise vs many expectations that it would be watered down from "based on current projected borrowing needs, Treasury anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters." 

• The main impact of this was to push back some analysts’ expectations of the initial coupon upsizing from August to November’s refunding – though many are questioning whether Treasury will increase coupon sizes at all this year.
• Prevailing opinion is that guidance will be changed in May to give plenty of notice ahead of a shift in issuance in November, though overall the perception is that risks are increasing of a later timeline.
• New Treasury Secretary Scott Bessent largely echoed the Refunding guidance, and his comments implied Treasury was eyeing a shift later this year or early in 2026. He also offered some interesting comments on extending the maturity profile of Treasury debt, though said "that's a long way off".
• February’s nominal coupon auctions were mixed, with four out of seven auctions trading-through. Short-end sales particularly impressed.
• March is set to see $315B in nominal Treasury coupon sales, in addition to $18B in 10Y TIPS and $28B FRN for a total of $361B – steady compared with February.