US: Supreme Court Strikes Down GOP+1 Congressional Map In Missouri

• Date $MM Issuer (Priced *, Launch #)
• 08/05 $Benchmark HSBC 6NC5 +115a, 6NC5 SOFR, 11NC10 +135a
• 08/05 $Benchmark BNY 4NC3 +75a, 4NC3 SOFR, 8NC7 +100a
• 08/05 $Benchmark Archer-Daniels-Midland 5Y +75a, 10Y +90a
• 08/05 $Benchmark Icon Inv 3Y +120a, 5Y +140a, 10Y +165a
• 08/05 $Benchmark Vici Properties 5Y +140a, 10Y +165a
• 08/05 $Benchmark Franklin Resources 10Y +125a
• 08/05 $Benchmark ADM 5Y +75a, 10Y +90a
• 08/05 $Benchmark Athene 10Y +180a
• 08/05 $500M State Street perp NC5 6.75%a
• 08/05 $500M Cavalier 7NC3 8.25%a
• 08/05 $500M Newell Brands 5NCL

The main headline in the August Treasury Refunding policy statement is that Treasury still "anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters", and the substitution of language in the refunding guidance paragraph to evaluate potential future "changes" to auction sizes (it used to say potential future "increases") is the only alteration. We wonder how significant that is.

• In previous cycles, the term "changes" used to imply future increases, such as in the 2022-2023 cycle when they started guiding first to whether "adjustments" in future may be appropriate, then "changes", then "modestly increase".
• Now, the guidance has gone from "increase" to "changes".
• Could be reading too much into it, but altering the categorical "increases" language may be possible that Treasury is opening the door to increasing some maturities (at the short end?) while decreasing them at maturities elsewhere on the curve, as it evaluates "trends in structural demand and potential costs and risks of various issuance profiles". 

Treasury maintained nominal auction sizes for the upcoming quarter, as expected, and kept largely unchanged its guidance on future auction sizes. 

• No change to "Treasury anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters."
• Tweak to its "looking ahead sentence" to say "Treasury continues to evaluate potential future changes to nominal coupon and FRN auction sizes, with a focus on trends in structural demand and potential costs and risks of various issuance profiles." Previously, it said "potential future increases."
• TBAC "continues to believe that increases in coupon issuance could be warranted in FY2027 and discussed potential changes to the forward guidance for Treasury to consider."
• Following up on the proposal to allow Treasury to invest excess cash from the TGA into the repo market, a "plurality" of primary
  dealers prefers a stable repo investment allocation, but views are mixed overall. Some day-to-day variability is seen as manageable but advance guidance was seen as instrumental to the program's success and ultimately modestly ease funding constraints, increase intermediation capacity, and improve the market’s ability to absorb additional Treasury securities.
• Dealers had very little balance sheet concerns about the potential change to the 7-year note issuance cycle.