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Treasury Receives Mixed Advice on Floating Rate Note Index

Feedback from participants and observers in the government bond market was split on what benchmark index the U.S. Treasury Department should use for pricing floating-rate notes, according to public comments.

The Treasury, which plans to issue floating rate notes later this year, queried feedback on Dec. 5 on the structure of the securities. The questions included one on whether the 13-week Treasury bill auction high rate or a Treasury general collateral overnight repurchase agreement rate would best “result in the Treasury attaining the lowest cost of financing over time.” The highest accepted competitive yield bid at a Treasury bill auction is also known as the stop-out, or stop, rate. The comment period ended yesterday.