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FEDERAL RESERVE BANK OF DALLAS F IS C A L A G EN T O F T H E U N IT E D S T A T E S Dallas, Texas, July 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 statement issued today by the Treasury Department in regard to an advance refunding: The Treasury today announced that the further improvement of its cash position at the close of June makes unnecessary any substantial cash borrowing at this time. Instead, the Treasury is offering holders of the four note issues due in August and November of this year and five other selected note and bond issues maturing from May 1965 to February 1967 an opportunity to extend the maturity of their holdings at attractive yields. Three issues are being offered in exchange: An additional amount of the outstanding 4% bonds due October 1, 1969, a new 4%% bond due November 15, 1973, and an additional amount of the outstanding 4^4% bonds due in August 1992. The securities eligible for exchange and those being newly offered are as follows: Securities eligible for exchange and their maturity dates Securities offered in exchange and their maturity dates 5% notes 8/15/64 T 33,4% notes 8/15/64 4% bonds 10/1/69 47/8 % notes 11/15/64 (reopened issue) 334% notes 11/15/64 41/ 3 % bonds 11/15/73 37/8 % notes 5/15/65 (new issue) 3 % % notes 2/15/66 4 1 4 % bonds 8/15/87-92 33,4% bonds 5/15/66 (reopened issue) 4% notes 8/15/66 3 % % notes 2/15/67 Exchange subscription books will be open for four days, July 13-16. Because of differences in coupon and maturity among the various eligible issues, cash adjustments will be made to provide all subscribers with appropriately attractive opportunities, as shown in the table on the reverse side. The public holds $7.6 billion of the four August and November 1964 maturities and about $8.4 billion is held by official accounts. These issues are nearer to final maturity than any issues included in previous advance refunding offers. Consequently their holders are not being offered the nontaxable exchange privilege that is, as has been customary, being made available to the other five issues eligible for this advance exchange. The five eligible issues maturing from May 1965 to February 1967 involve $19.0 billion of public holdings. This total is somewhat larger than that involved in the most recent advance refunding in January but is smaller than the total offered in September 1963. Official accounts hold about $6.8 billion of the 1965-1967 maturities. The Treasury is in a position to undertake this advance refunding operation because its immediate cash needs are much smaller than had been anticipated earlier. At this time, cash borrowing is being confined to increases in the weekly bill issue, beginning with $100 million for the issue dated July 16. The Treasury’s cash needs over the balance of the calendar quarter will require sufficient borrowing to permit timely additions to the supply of Treasury bills as necessary to counter any undue downward pressure on Treasury bill yields. The official circulars, subscription forms, and other material containing additional details of the offering will be mailed in time to reach you by Monday, July 13. Yours very truly, Watrous H. Irons President This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) PA YM ENTS TO AND BY T H E SU BSCRIBER IN TH E JU L Y 1964 ADVANCE R E FU N D IN G Securities To Be Exchanged 1964 Maturities: 5% Note, 8 /1 5 /6 4 S % % Note, 8 /1 5 /6 4 4y8% Note, 11/15/64 3%.% Note, 11/15/64 1965-67 Maturities: 3% % Note, 5 /1 5 /6 5 3%% Note, 2 /1 5 /6 6 3%% Bond, 5 /1 5/6 6 4% Note, 8 /1 5 /6 6 3%% Note, 2 /1 5 /6 7 1964 Maturities: 5% Note, 8 /1 5 /6 4 3%% Note, 8 /15 /6 4 4%% Note, 11/15/64 3%% Note, 11/15/64 1965-67 Maturities: 3%% Note, 5 /1 5/65 3%% Note, 2 /1 5 /6 6 3%% Bond, 5 /1 5/6 6 4% Note, 8 /1 5 /6 6 3%% Note, 2 /1 5 /6 7 (In Dollars Per $100 Face Value) Accrued Interest Amounts To Be Paid To To July 22,1964 Or By Subscribers To Be Paid Price Adjustment To By Payment1 Subscriber Subscriber To By 2 3 Subscriber Subscriber For the 4% Bond 1 0 /1 /6 9 .450000 .300000 .800000 .450000 .500000 .100000 .250000 .650000 — ' .900000 .750000 1.250000 .900000 .950000 .550000 .700000 1.100000 .150000 _ — — 1.224044 1.224044 1.224044 1.224044 1.396286 .703703 .476771 — .081109 1.224044 1.224044 1.224044 1.224044 1.224044 .449445 — 1.162220 .049445 .008011 — .281109 — — — — — 3.070330 2.377747 2.150815 1.592935 — — — — — — 1.666033 2.123489 1.392935 2.836264 1.723489 — — — — 2.170330 1.627747 .900815 .692935 1.844780 1.844780 1.844780 1.844780 .375550 — — — .317033 .543965 1.101845 .716033 1.573489 .692935 1.736264 1.573489 1.844780 1.844780 1.844780 1.844780 1.844780 — — .141484 — 1.028747 .571291 1.301845 — .971291 July 8,1964 2.170330 1.627747 .900815 .692935 .716033 1.573489 .692935 — 1.736264 1.573489 .300000 For the 4(4% Bond 11/15/73 _ _ _ _ — 2.170330 1.627747 .900815 .692935 .716033 1.573489 .692935 — 1.736264 — 1.573489 For the 4'A% Bond 8/15/87-92 _ _ 1964 Maturities: 5% Note, 8 /1 5 /6 4 .050000 — — 3%% Note, 8 /15 /6 4 .100000 — 4%% Note, 11/15/64 .400000 — 3%% Note, 11/15/64 .050000 1965-67 Maturities: 3%% Note, 5 /1 5/65 .100000 — 3%% Note, 2 /1 5 /6 6 .300000 — 3%% Bond, 5 /1 5/6 6 .150000 — 4% Note, 8 /1 5 /6 6 .250000 3%% Note, 2 /1 5 /6 7 .700000 — OFFICE OF THE SECRETARY OF THE TREASURY OFFICE OF DEBT ANALYSIS 1 Payment on account of purchase price of offered securities. 2 On securities to be exchanged. 3 On securities offered. Net Amount To Be Paid To By Subscriber Subscriber — — — IN V ESTM EN T RETU R N S IN T H E JU LY 1964 ADVANCE REFU N D IN G Approximate Investment Yield Approximate Reinvestment Rate From 7 /2 2 /6 4 to Maturity1 for the Extension Period2 4 '4 % Bond 4 >4% Bond 4% Bond 8/15/87-923 4% Bond 4% % Bond 8/15/87-923 Securities Eligible 1 0 /1 /6 9 4 ^ % Bond To First Call 1 0 /1 /6 9 11/15/73 To To for Exchange_______________ 3 11/15/73 or_Maturity_______3____________ 3 First Call Maturity 1964 Maturities: 4.25% 4.25% 4.24% 4.08% 5% Note, 8 /15 /6 4 4.22% 4.24% 4.06% 4.25 4.25 4.23 4.07 3% % Note, 8 /15 /6 4 4.06 4.22 4.24 4.26 4.27 4.26 4.22 4.12 4% % Note, 11/15/64 4.06 4.24 4.26 4.26 4.27 4.12 3%% Note, 11/15/64 4.22 4.24 4.06 1965-67 Maturities: 4.28% 4.27% 4.29% 3% % Note, 5 /15 /6 5 4.15% 4.08% 4.23% 4.25% 4.29 4.34 4.30 4.24 4.22 3%% Note, 2 /15 /6 6 4.09 4.25 4.30 4.36 4.30 4.23 3%% Bond, 5/1 5 /6 6 4.08 4.23 4.25 4.30 4.31 4.24 4.36 4% Note, 8 /1 5/66 4.08 4.23 4.25 4.32 4.31 4.39 4.28 3%% Note, 2/ 15/ 67 4.08 4.23 4.25 OFFICE OF THE SECRETARY OF THE TREASURY July 8, 1964 OFFICE OF DEBT ANALYSIS 1 Yields to nontaxable holders (or before tax) on issues offered in exchange based on prices of eligible issues (adjusted for payments on account of issue price). Prices are the mean of bid and ask quotations at noon on July 7, 1964. 2 Rate for nontaxable holders (or before tax). 3 Reopening of an existing security.
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