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FED ER AL RESERVE BANK OF N E W YORK Fiscal Agent of the United States r Circular No. 7 II I. March 13, 1973 1T J OFFERING OF T W O SERIES OF T R E A SU R Y BILLS $2,400,000,000 of 91-Day Bills, Additional Amount, Series Dated December 21, 1972, Due June 21, 1973 (To Be Issued March 22, 1973) $1,800,000,000 of 182-Day Bills, Dated March 22, 1973, Due September 20, 1973 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text o f a notice issued by the Treasury Department, released at 4 p.m. today: Th e Treasury Department, by this public notice, invites tenders fo r tw o series o f Treasury bills to the aggregate amount o f $4,200,000,000, o r thereabouts, f o r cash and in exchange f o r T rea sury bills m aturing M arch 22, 1973, in the amount o f $4,207,235,000, as fo llo w s : 91-day bills (to maturity date) to be issued M arch 22, 1973, in the amount o f $2,400,000,GOO, or thereabouts, representing an additional amount o f bills dated D ecem ber 21, 1972, and to mature June 21, 1973 (C U S I P N o. 912793 Q Y 5 ) , originally issued in the amount o f $1,905,870,000, the additional and original bills to be freely interchangeable. 182-day bills, fo r $1,800,000,000, or thereabouts, to be dated M arch 22, 1973, and to mature September 20, 1973 (C U S I P N o. 912793 R V 0 ). T h e bills o f both series w ill be issued on a discount basis under com petitive and noncom petitive bidding as hereinafter provided, and at maturity their face amount will be payable w ithout interest. T h ey w ill be issued in bearer fo rm only, and in denominations o f $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (m aturity va lu e). Tenders w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m.. Eastern Standard time, M onday, M arch 19, 1973. Tenders w ill not be received at the Treasury Department, W ashington. Each tender must be f o r a minimum o f $10,000. Tenders over $10,000 must be in mul tiples o f $5,000. In the case o f com petitive tenders the price offered must be expressed on the basis o f 100, with not m ore than three decimals, e.g., 99.925. Fractions may not be used. It is urged that tenders be made on the printed form s and forw arded in the special envelopes which w ill be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions generally m ay submit tenders fo r account o f customers, provided the names o f the customers are set forth in such tenders. Others than banking institutions will not be per mitted to submit tenders except f o r their ow n account. Tenders w ill be received without deposit fro m incorporated banks and trust companies and fro m responsible and recognized dealers in invest ment securities. Tenders from others must be accompanied by payment o f 2 percent o f the fa ce amount o f Treasury bills applied fo r, unless the tenders are accompanied by an express guaranty o f payment b y an incorporated bank o r trust company. Immediately a fter the closing hour, tenders w ill be opened at the Federal R eserve Banks and Branches, follow in g w hich public announcement w ill be made by the Treasury Department o f the amount and price range o f accepted bids. O nly those submitting com petitive tenders w ill be advised o f the acceptance o r rejection thereof. T h e Secretary o f the Treasury expressly reserves the right to accept o r reject any o r all tenders, in w hole o r in part, and his action in any such respect shall be final. S ubject to these reserva tions, noncom petitive tenders f o r each issue fo r $200,000 o r less without stated price fro m any one bidder w ill be accepted in full at the average price (in three decim als) o f accepted competitive bids f o r the respective issues. Settlement fo r accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on M arch 22, 1973, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing M arch 22, 1973. Cash and exchange tenders will receive equal treatment. Cash adjustments w ill be made fo r differences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. U nder Sections 4 5 4 (b ) and 1221(5) o f the Internal Revenue Code o f 1954, the amount o f discount at which bills issued hereunder are sold is considered to accrue when the bills are sold, redeemed or otherw ise disposed o f, and the bills are excluded fro m considera tion as capital assets. A ccordin gly, the ow ner o f Treasury bills (oth er than life insurance com panies) issued hereunder must include in his income tax return, as ordinary gain or loss, the difference between the price paid fo r the bills, whether on original issue o r on subsequent purchase, and the amount actually received either upon sale o r redemption at maturity during the taxable year fo r which the return is made. T reasury Department Circular N o. 418 (current revision) and this notice prescribe the terms o f the Treasury bills and govern the conditions o f their issue. Copies o f the circular m ay be ob tained fro m any Federal Reserve Bank o r Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, March 19, 1973, at the Securities Department o f its Head Office and at its Buffalo Branch. Tender forms for the respective series are enclosed. Please use the appropriate forms to submit tenders and return them in the enclosed envelope marked “ Tender for Treasury Bills.” Tenders not requiring a deposit may be submitted by telegraph, subject to written confirmation; no tenders may be submitted by telephone. Payment fo r the Treasury bills cannot be made by credit through the Treasury Tax and Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. Results of the last weekly offering o f Treasury bills (91-day bills to be issued March 15, 1973, representing an additional amount of bills dated December 14, 1972, maturing June 14, 1973; and 182-day bills dated March 15, 1973, maturing September 13, 1973) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST W EEKLY OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED MARCH 15, 1973) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing June 14,1973 P r ice 182-Day Treasury Bills Maturing September 13,1973 A p p ro x . equiv. annual rate Price A p p ro x . equiv. annual rate High .. 98.509a 5.898% 96.778b 6.373% Low . . . 98.468 6.061% 96.715 6.498% Average 98.484 5.997%1 96.744 6.440%1 a E xcep tin g one tender o f $2,000,000. b E xcepting one tender o f $300,000. 1 These rates are on a bank discount basis. T he equivalent coupon issue yields are 6.17% fo r the 91-day bills, and 6.75% fo r the 182-day bills. (97 percent of the amount of 91-day bills bid for at the low price was accepted.) (38 percent of the amount of 182-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing June 14,1973 A pplied f o r D istrict Boston .......................... ........ $ 21,385,000 182-Day Treasury Bills Maturing September 13,1973 A ccep ted $ 11,385,000 A pplied f o r $ 14,055,000 A ccep ted $ 4,055,000 New Y o r k .................... ........ 2,728,510,000 1,826,410,000 2,342,640,000 1,483,340,000 Philadelphia.................. ........ 36,060,000 25,910,000 13,820,000 11,820,000 Cleveland ...................... ........ 24,520,000 24,520,000 14,470,000 14,470,000 R ich m on d ...................... ........ 16,130,000 16,130,000 12,065,000 12,065,000 Atlanta .......................... ........ 18,120,000 18,120,000 12,355,000 12,355,000 C h ica go.......................... ........ 274,460,000 239,460,000 189,720,000 110,720,000 St. L o u is ........................ ........ 46,140,000 43,610,000 29,540,000 28,040,000 Minneapolis .................. ........ 26,190,000 22,190,000 21,730,000 15,730,000 Kansas C i t y .................. ........ 35,920,000 27,890,000 27,800,000 23,800,000 Dallas ............................ ........ 34,405,000 15,375,000 29,095,000 9,475,000 154,055,000 129,055,000 94,160,000 74,160,000 San F ra n cisco.............. T otal .................... ........ $3,415,895,000 $2,400,055,000° C Includes $216,050,000 noncompetitive tenders accepted at the average price o f 98.484. d Includes $111,600,000 noncompetitive tenders accepted at the average price o f 96.744. $2,801,450,000 $1,800,030,000d