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FEDERAL RESERVE BANK O F DALLAS
FISCAL. A G E N T O F T H E U N IT E D ST A T E S

D allas, Texas, Ja n u a ry 8, 1964

PRELIMINARY ANNOUNCEMENT
ADVANCE REFUNDING OFFER

To All Banking Institutions and Others Concerned
in the Eleventh Federal Reserve District:

There is quoted below a press statem ent issued today by the Treasury D epartm ent in regard to an
advance refunding:
The Treasury today announced an advance refunding offer. Recent improvement in the cash
position makes unnecessary any additional cash borrowing at this time. Instead, the Treasury will
take advantage of the customarily favorable m arket conditions in January to further improve its
debt structure by offering holders of six issues of outstanding Treasury securities an opportunity to
extend their holdings at attractive yields. Issues m aturing from August, 1964, to May, 1965, m ay
be exchanged for additional amounts of 4 percent bonds maturing in 1970 or 4 lA percent bonds
due in 1975-85.
The public holds $15.3 billion of the securities eligible for exchange; about $9.4 billion are also
held by official accounts. The outstanding total is $24.7 billion. Books will be open for the exchange all
of next week, January 13-17. Because of differences in coupon and m aturity among the various eligible
issues, cash adjustments will be made to provide all subscribers with comparably attractive opportu­
nities. The securities eligible for exchange and those being newly offered are as follows:
Securities eligible for exchange
and their maturity dates

33
/4%
5%
33/4%
4% %
2% %
4s
/s%

notes,
notes,
notes,
notes,
bonds,
notes,

E-1964 8 /1 5 /6 4
B-1964 8 /1 5 /6 4
F-1964 11/15/64
C-1964 11/15/64
1965 2 /1 5 /6 5
A-1965 5 /1 5 /6 5

Securities offered in exchange
and their maturity dates

4% bonds, 1970 8 /1 5 /7 0
(additional issue)
4V4% bonds, 1975-85 5/15/75-85
(additional issue)

The total public holding of the eligible issues is appreciably less than th at of other recent
advance refundings. To assure ready accommodation of this offering within the current market, and
preclude the possibility of excessive subscriptions of a speculative character, the Treasury is limiting
the total of subscriptions it will accept for the 4 percent bonds to $4 billion. Allotments for the
4 X percent bonds will be limited to $750 million. Present prospects suggest th at the Treasury will
A
not, apart from regular m onthly issues of one-year bills, need to borrow for cash until April at the
earliest. No substantial cash needs are expected until the approach of the next fiscal year. However,
the cash position will remain sufficiently flexible to allow scope for issuance of additional amounts
of Treasury bills, as needed, if further influence should be required upon short-term interest rates for
balance of payments reasons.
The Treasury’s objectives, now as in the past, are to conduct debt operations so as to help pro­
mote economic growth and stability while at the same time meeting the Government’s cash needs,
maintaining a balanced debt structure, helping to protect the balance of payments, and avoiding
excessive liquidity which could create potential inflationary pressures. The current offering, in further­
ing those objectives, is a natural accompaniment of President Johnson’s efforts, indicated today in his
State of the Union message, to reduce sharply the size of the Government’s deficit financing require­
ments, and to shorten the period over which further deficits will be incurred.
The official circulars, subscription forms, and other m aterial containing additional details of the offering
will be mailed Thursday, January 9.
Yours very truly,
W atrous H. Irons
President

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)


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