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Treasury Tax & Loan Investment Program

Treasury Tax & Loan Investment Program. Term Investment Option (TIO) Program Overview Updated September 2009. TT&L Investment Program Introduction. TT&L Organizational Stakeholders Department of the Treasury / Fiscal Service Office of the Fiscal Assistant Secretary ( OFAS )

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Treasury Tax & Loan Investment Program

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  1. Treasury Tax & Loan Investment Program Term Investment Option (TIO)Program Overview Updated September 2009

  2. TT&L Investment Program Introduction TT&L Organizational Stakeholders • Department of the Treasury / Fiscal Service • Office of the Fiscal Assistant Secretary (OFAS) • Financial Management Service (FMS) • Bureau of the Public Debt (BPD) • Federal Reserve System • Federal Reserve Bank of St. Louis • Federal Reserve Bank of New York • TT&L Depositary Institutions

  3. TT&L Investment Program Overview • Treasury has funds based on: • Cyclical factors (strong vs. weak economy) • Seasonal factors (peak tax periods) • Monthly cash flow (middle through end of month) • Legislative Factors (debt ceiling) • Investment Options • Direct Investment • Dynamic Investment • Special Direct Investment • Term Investment Option (TIO) • Reverse Repurchase Agreement (REPO)

  4. Term Investment Option (TIO)Overview • Treasury Objectives • Provide tax payers with a greater rate of return on funds invested • Increase investment capacity in the TT&L program • Participant Benefits • Greater certainty of funding • Enhanced flexibility • Pilot Program - April 2002 • Permanent Program Inception - October 2003

  5. Term Investment Option (TIO)Overview • TIO Participants • Participants must be TT&L depositaries in sound financial condition • Money center banks, regional banks, & credit unions • Currently 65 participants (September 2009)

  6. Term Investment Option (TIO)Overview • General Overview • Excess funds offered for a fixed term • Funds awarded through a competitive bidding auction process • Bids submitted and accepted via telephone

  7. Term Investment Option (TIO)Process • Update Notification • General intent notice sent to participants (via e-mail) one day prior to official announcement • Announcement Day • Offering amount, length of term, acceptable collateral • Auction Day • Participants place bids by calling 1-877-830-3496 prior to cutoff time (usually 11:00am ET) • Results announced within 30 minutes

  8. Term Investment Option (TIO) Process • Investment Day • Collateral pledged by designated time (12:00pm ET) • Funds are settled into awarded participant’s TIO and Reserve account (by 2:00pm ET) • Maturity Day • Principal and interest are collected from participants • Collateral is available after funds are collected

  9. Term Investment Option Sources of Information • Historical Results • For announcement information, auction results and an historical summary of TIO activity, visit the Treasury’s FMS Website. • E-mail notification sign-up available. http://fms.treas.gov/tip/reports.html

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