Today, the U.S. Treasury Department will hold its first auction of floating-rate securities. This is the first new security issued by the government in nearly two decades. These floating rate securities, or “floaters,” offer yields that adjust based on changes in interest rates to provide investors with a hedge against a potential rise in interest rates.
To track this new asset class, Bloomberg Indexes will launch the Bloomberg U.S. Treasury Floating Rate Bond Index at the end of the first day of trading, January 31. In addition to the note issued at the initial auction, the index will track securities issued in subsequent auctions. Index data will be available to both buy and sell-side participants on the Bloomberg Professional service via the ticker BUSYFL.
“This new asset class will offer investors and market participants a new way to manage their portfolios in a rising interest rate environment,” said Srikant Dash, head of Bloomberg Indexes. “With the launch of our index, Bloomberg Indexes provides the market an independent, transparent benchmark to track the evolution of this new class of securities.”
Bloomberg Indexes provides global, independent indexes for the fixed-income, currency and commodity markets. This is the latest in a series of innovative new indexes launched by Bloomberg in the recent past, including the Bloomberg Dollar Spot Index, which provides a new, relevant, dynamic measure of the U.S. dollar; and the European Banks Funding Margin Index, which provides the first market driven measure of European banks’ funding spreads.