Description: 1-Year 10-Month FRN
Term: 1-Year 10-Month
Series: BJ-2017
Spread: 0.168%
High Discount Margin: 0.330%
Price: $99.698968
Allotted at High: 13.86%
Accrued Interest*: $0.056846705
Total Tendered: $45,228,818,800
Total Accepted: $13,000,418,300
Issue Date: 12/28/2015
Dated Date: 10/31/2015
Original Issue Date: 11/02/2015
Maturity Date: 10/31/2017
CUSIP: 912828M23
*Per $100
Floating Rate Notes (FRNs):
Rates & Terms -
The U.S. Treasury began issuing Floating Rate Notes (FRNs) in January 2014. You can buy them in multiples of $100. The securities have a term of two years.
Price and Interest -
The price of an FRN is determined at auction. The price may be greater than, less than, or equal to the FRN's par amount.
The interest rate of an FRN changes, or “floats,” over the life of the FRN. The interest rate is the sum of two components: an index rate and a spread.
--- Index rate. This rate is tied to the highest accepted discount rate of the most recent 13-week Treasury bill. We auction the 13-week bill every week, so the index rate of an FRN is re-set every week.
--- Spread. The spread is a rate we apply to the index rate. The spread stays the same for the life of an FRN. The spread is determined at the auction where the FRN is first offered. The spread is the highest accepted discount margin in that auction.
Calculation -
The spread plus the index rate equals the interest rate. We apply the interest rate to an FRN’s par amount on a daily basis; so, the aggregate interest earned to date on an FRN accumulates every day.
Rates in recent auctions
Interest Payments -
Floating Rate Notes pay interest quarterly.
Accrued Interest -
Sometimes when you buy an FRN, we charge you accrued interest. This is interest the security earned in the current interest period before you took possession of the security.
If we charge accrued interest, we pay it back to you as part of your next interest payment.
Auction Pattern -
We auction FRNs each month, with original issues in January, April, July, and October, and reopenings in the other months.
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