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RESEARCH CENTER

Floating Rate Notes (FRNs): FAQs

When did the U.S. Treasury begin issuing FRNs?

January 2014

What is the maturity term for Floating Rate Notes (FRNs)?

Two years.

What is the auction pattern for FRNs?

We auction FRNs each month, with original issues in January, April, July, and October, and reopenings in the other months.

What are reopenings, premiums, and accrued interest?

In a reopening, we auction additional amounts of a previously issued security. A reopened FRN has the same maturity date and spread as the original FRN, but a different issue date and usually a different price.

When you buy a reopened security, you have to pay a premium if the price of the security at reopening is greater than the face value of the security. The price of the reopened security is determined at auction. Because the security is being auctioned at different times, market conditions probably won't be the same and, therefore, the prices likely won't be the same either.

Also, when you buy a reopened security, regardless of its price, you may have to pay accrued interest--interest the security earns from the original dated date of the security until the date we issue the security to you. However, we pay the accrued interest back to you in your first interest payment.

How can I place a competitive bid for an FRN?

To place a competitive bid, you must use a bank or broker. (Our system, TreasuryDirect, allows only noncompetitive bids.)