US expected to borrow $444 bn in second half of 2013

The US Treasury has cut the federal government's market borrowing estimates for the second half of 2013 to $444 billion.

This is because of the dividend payments of $66 billion from mortgage giants Fannie Mae and Freddie Mac that boosted its cash holdings leaving the Treasury with a $135 billion cash balance, $60 billion more than it had anticipated, a treasury statement said.

The department is estimated to issue $209 billion in net marketable debt from July to September, which is down from its estimate of $223 billion made three months ago, with a cash balance of $95 billion by the end of the quarter.

For the fourth quarter it is expected to borrow $235 billion with cash balance $80 billion.

In the April-June second quarter, the Treasury paid $11 billion in net marketable debt, ending with $135 billion of cash balance.

The US budget deficit topped around $1.1 trillion in the 2012 fiscal year ended September. This was the fourth consecutive fiscal year that surpassed $1 trillion.

The federal government ran a record budget deficit of $1.41 trillion in the 2009 fiscal year and a $1.29 trillion imbalance in the 2010 fiscal year.

In order to finance government operations, the Treasury chose to issue net marketable debt, including bills, notes and bonds, and such issuances have increased dramatically over the past years due to the financial crisis and economic recession.

Every quarter, it holds a refunding: a replacement of government debt, often debt that is about to mature, with new debt.

Details relating to the next refunding will be released by the Treasury today.

The federal government incurred a record budget deficit of $1.41 trillion in the 2009 fiscal year and a $1.29 trillion imbalance in the 2010 fiscal year.