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1. On the first Thursday of each month, the French Treasury will auction at least FRF 1 billion par value on the following Obligations Assimilables du Trésor (OAT) lines:
- a fixed-rate 10-year line of either the existing 5.50% April 2007 OAT or another new OAT line with maturity 2007 or 2008;
- if market conditions permit, other fixed-rate or floating-rate lines, either existing or new.
In the event that an auction concerns both fixed-rate and floating-rate securities, specific information will be provided about the amount to be issued on floating-rate lines. Moreover, in conjunction with the Association des Spécialistes en Valeurs du Trésor (Primary Dealer Association), the Treasury is examining the feasibility of conducting separate auctions for floating-rate securities.
2. In the first half of 1997, on the second Thursday of each month, the French Treasury will auction at last ECU 100 million of ECU-denominated BTANs or OATs (as in 1996). If market conditions or the calendar make it necessary to cancel or change the date of this auction, the change will be announced at the latest on the preceding Friday. Depending on market conditions, the Treasury may open new lines as needed in order to optimize coverage of the entire yield curve.
In the second half of 1997, ECU-denominated lines will be issued simultaneously with franc-denominated lines in order to make franc and ECU-denominated lines more homogeneous in preparation for: ECU-denominated BTANs may be auctioned as part of the monthly BTAN auction; ECU-denominated OATs may be auctioned as part of the monthly OAT auction. Moreover, the characteristics (coupon and maturity) of new ECU-denominated lines will correspond as much as possible to those of franc-denominated government securities. Thus, starting January 1, 1999, securities initially issued in French francs or ECU will be fungible as part of one line of Euro-denominated Treasury securities.
3. On the third Thursday of each month, the French Treasury will auction at least FRF 1 billion par value of at least one line of 2 or 5-year BTANs.
4. The Treasury may conduct securities-exchange or repurchase transactions as well as currency and interest-rate swaps by calls for tenders or syndication. The volume of securities outstanding and the volume of securities cancelled during the preceding month as a result of these transactions will be published at the end of each month, in accordance with the customary procedures relating to negotiable public debt.
The Treasury may repurchase or exchange franc- or ECU-denominated Treasury securities as part of active debt management.
5. The Treasury reserves the right not to proceed with any of the afore-mentioned auctions in case of exceptional market circumstances, or to hold an additional auction, depending on its borrowing requirement and the state of the markets.
Note, moreover, that the Treasury reserves the right to open new long- and medium-term lines in French francs or ECUs during the year or to issue further tranches on previously issued lines, depending on market conditions. It further reserves the right to resort to bank syndication procedures. On each occasion, the precise nature of the lines issued by the Treasury, together with information concerning the volume of the issue, will be made public during the days prior to issue.
6. In order to minimize the risk of the government securities market, auction settlement times will be shortened:
From the first auction in January, payment on all new BTF lines will be made on the Thursday following the auction.
From 1st July 1997, the settlement time for BTAN and OAT auctions, whether denominated in French francs or in ECU, will be shortened to one calendar week. Thus, each issue will be settled on the Thursday following each auction.