The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
federal Rese r v e b a n k o f Dallas F IS C A L A G E N T O F T H E U N IT E D S T A T E S DALLAS. TEXAS 75222 Circular No. 70-26l October 30, 1970 To All Banking Institutions and Others Concerned in the Eleventh Federal Reserve District: There is quoted below a press statement issued by the Treasury Department in regard to current financing: TREASURY ANNOUNCES AUCTION OF $2.0 BILLION OF NEW NOTES The Treasury announced preliminary reports indicate that about $5-3 billion of the $6.0 billion of November 15 5io notes held by the public will be exchanged for new notes. This leaves about $0.7 billion, or 12°jo to be paid off in cash. To provide cash to pay off these notes and to raise part of the cash needed for the remainder of the calendar year, the Treasury also announced that it will auction $2.0 billion of 6 3/M ° T? year notes. The notes will be dated November l6 , 1970, and will mature on May 15, 1972. They will be auctioned Thursday, November 5* The Treasury noted that the use of the auction method of sale represents an adaption of the technique used successfully for many years in marketing Treasury bills. This test of the auction technique as a way of selling Treasury notes is part of a continuing effort of the Treasury to develop more efficient debt management techniques. The details of the Sales are attached. Nonbank investors should note particularly that payment for the notes must be completed in funds available to the Treasury by November l6 , 1970, or deposits will be subject to forfeiture. Yours very truly, P . E . Coldwell President Enclosure This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) DETAILS OF TREASURY ANN OUR CEMENT OF AUCTIOR OF $2.0 BILLIOR OF REW ROTES The $2.0 billion, or thereabouts, of 1 l/2 year 6 3/M ° Treasury Rotes of Series D-1972 to be sold at auction under competitive and noncompetitive bidding will be issued on November l6 , 1970, and mature May 15, 1972. The notes will be issued in registered and bearer form in denominations of $1 ,0 0 0 , $5 ,0 0 0 , $1 0 ,0 0 0 , $1 0 0 ,0 0 0 and $1 ,0 0 0 ,0 0 0 . Tenders for the notes will be received up to 1:30 p.m. Eastern Standard Time, Thursday, November 5> D970, at any Federal Reserve Bank or Branch and at the Office of the Treasurer of the United States, Washington, D. C. 20220. Tenders received after the closing hour will not be accepted. Each tender must be in the amount of $1,000 or a multiple thereof, and must state the price offered, if it is a competitive tender, or the term "noncompetitive", if it is a noncompetitive tender. The price on competitive tenders must be expressed on the baiss of 1 0 0 , with two decimals e.g., 100.00. Tenders at a price less than 99*76 will not be accepted. Fractions may not be used. The notation "Tender for Treasury Rotes" should be printed at the bottom of the envelope in which the tender is submitted. Public announcement will be made of the amount and price range of accepted tenders. Those submitting tenders will be advised of the acceptance or rejection thereof. The Secretary of the Treasury expressly reserves the right to accept or reject any or all tenders, in whole or in part, and his action in any such respect shall be final. Subject to these reservations noncompetitive tenders for $2 0 0 ,0 0 0 or less will be accepted in full at the average price (in two decimals) of accepted competitive tenders. This price may be 100.00, or more or less than 1 0 0 .0 0 . Commercial banks, which for this purpose are defined as banks accepting demand deposits, may submit tenders for account of customers provided the names of the customers are set forth in such tenders. Others than commercial banks will not be permitted to submit tenders except for their own account. Tenders will be received without deposit from commercial banks for their own account, Federally-insured savings and loan associations, States, political subdivisions or instrumentalities thereof, public pension and retirement and other public funds, international organizations in which the' United States holds membership, foreign central banks and foreign States, dealers who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York their positions with respect to Government securities and borrowings thereon, and Government accounts. Tenders from others must be accompanied by payment of 5 percent of the face amount of notes applied for. Payment for accepted tenders must be completed on or before Monday, November l6 , 1970, at the Federal Reserve Bank or Branch or at the Office of the Treasurer of the United States in cash, 51° Treasury Notes of Series A-I9 7 O (will be accepted at par), or other funds immediately available to the Treasury by that date. "Where full payment is not completed in funds available by the payment date, the allotment will be canceled and the deposit with the tender up to 5 percent of the amount of notes allotted will be subject to forfeiture to the United States. Nonbank investors should understand that their checks will constitute payment only if they are fully and finally collected by the payment date, Monday, November 16 , 1970* Checks not so collected will subject the investor’s deposit to forfeiture as set forth in the preceding paragraph. A check payable other than at a Federal Reserve Bank received on the payment date will not constitute immediately available funds on that date. Accordingly, in order that a check will constitute immediately available funds to the Treasury by the payment date, it should be submitted sufficiently in advance to assure completion of its collection by Monday, November 16 , 1970. Checks should be drawn to the order of the office to which the tender is submitted. If a check for the full amount of the payment is submitted with the subscription, it should be, in the case of tenders at a competitive price, equal to the total purchase price of the notes bid for, or, in the case of noncompetitive tenders, equal to the full face amount of the notes bid for. Bidders on a noncompetitive basis who submit checks for the face amount of the notes bid for will be (l) required to pay an additional amount if the purchase price is more than 1 0 0 , or (2)paid the difference if the purchase price is less than lOO. Commercial banks are prohibited from making unsecured loans, or loans collateralized in whole or in part by the notes bid for, to cover the deposits required to be paid when tenders are entered and they will be required to make the usual certification to the effect. Other lenders are requested to refrain from making such loans. All bidders are required to agree not to purchase or to sell or to make any agreements with respect to the purchase or sale or other disposition of the notes bid for under this offering at a specific rate or price, until after 1:30 p.m. Eastern Standard Time, Thursday, November 5, 1970. Any qualified depositary will be permitted to make settlement by credit in its Treasury Tax and Loan Account for not more' than 50 percent of the amount of notes allotted to it for itself and its customers. 70-261 TENDER 6%% TREASURY NOTES OF SERIES EM972 Maturing May 15,1972 Dated November 16,1970 To: Federal Reserve Bank, Station K, Dallas, Texas 75222 or — The__________________________ Branch El Paso 79999 Houston 77001 San Antonio 78206 (Date) PLEASE Pursuant to the provisions of Treasury Department Circular, Public Debt Series No. 12-70, as shown on the reverse side, the undersigned offers to purchase Treasury notes in the amount shown below, and agrees to pay for the amount allotted, on or before the issue date, by the method and at the rate indicated. NONCOMPETITIVE TENDER $_______________________________________NOT TO EXCEED $200,000 OBSERVE CLOSING TIME OF 12:30 P.M., CENTRAL Noncompetitive tenders for $200,000 or less from any one bidder, without stated price, will be accepted in full at the average price (in two decimals) of accepted competitive bids. Prices should be expressed on the basis of $ )$-----------------------------------100, with two decimals, e. g., 100.00. Fractions $ COMPETITIVE TENDERS -----------------------------------must not be used. Tenders at a price less than $ 99.76 will not be ac cepted. )$- Denominations Desired Nnmber of Pieces M aturity Value $ 1,000 $ $ 5,000 $— 10,000 $ $ ......... METHOD OF PAYMENT □ By charge to our Treasury Tax and Loan Account, (not to exceed 50% of amount allotted) □ Payment to be made by.................................................. — .................................. - (Name of Bank) ___________________________________ @ $ 100,000 $----------------$1;,000,000 $ □ By charge to our reserve account on payment date. □ By draft enclosed (effectual delivery of enclosed draft shall be on latest day which will permit presentment in order to obtain irrevocably collected funds on payment date). - ___________________________________ SCHEDULE FOR ISSUE OF REGISTERED SECURITIES Name or names in which securities are to be registered, tax account number of owner and mailing address for interest checks. Denominations Desired Piece* Denomination ? STANDARD - Social Security No. or - @ $ Face Amount - I I I Employer Identification No. Amount $ $ CERTIFICATION BY COMMERCIAL BANKS TIME, THURSDAY, NOVEMBER We hereby certify that we have received tenders from our customers in the amounts set opposite the customers’ names on the list which is made a part of this tender; that there has been paid to us by each such customer as required by the official offering circular, not subject to withdrawal until after allotment, not less than 5 percent of the amount bid for; that we have not made unsecured loans, or loans collateralized in whole or in part by the notes bid for, to supply the amounts of such payments to any of such customers; that we have no beneficial interest in the tenders of such customers; and that none of our customers has any beneficial interest in the amount bid for our own account. We further certify that tenders received by us, if any, from other commercial banks for their own account and for the account of their customers have been entered with us under the same conditions, agreement and certifications as set forth in this form. CERTIFICATION BY ALL SUBSCRIBERS We certify that all subscribers listed hereon have agreed not to purchase or to sell, or to make any agreements with respect to the purchase or sale or other disposition of any of the notes of this issue at a specific rate or price, until after 1:30 p.m., Eastern Standard Time, Thursday, November 5, 1970. 5, 1970 Delivery Instructions: □ Hold in Custody Account—Member banks for own account only □ Pledge to secure Treasury Tax and Loan Account □ Ship to. (Subscriber’s full name or corporate title) (Address) By (Authorized official signature and title) (For the account of, if tender is for another subscriber) (Address) (See reverse for announcement) UNITED STATES OF AMERICA 6 % PERCENT TREASURY NOTES OF SERIES D -1 9 72 Dated and bearing interest from November 16, 1970 Due May 15, 1972 TREA SU RY D EPA RTM EN T Office of the Secretary W ashington, O ctober 30, 1970 DEPARTMENT CIRCULAR P ublic D eb t Series No. 12-70 I. OFFERING OF NOTES PLEASE 1. T he Secretary of the T reasury, pursuant to th e authority of th e Second L iberty Bond Act, as am ended, invites tenders at a price not less th an 99.76 percent of their face value for $2,000,000,000, or thereabouts, of notes of th e U nited States, designated 6 3A percent T reasury N otes of Series D-1972. T enders will be received up to one-thirty p.m., E astern Standard Tim e, Thursday, N ovem ber 5, 1970. T he notes will be issued under com petitive and non-com petitive bidding, as set forth in Section III hereof. T he 5 percent T reasury N otes of Series A-1970 m aturing N ovem ber 15, 1970, will be accepted a t p ar in paym ent in whole or in p a rt to th e extent subscriptions are allotted by the Treasury. II. DESCRIPTION OF NOTES OBSERVE CLOSING TIME OF 12:30 P.M., CENTRAL STANDARD 1. T he notes will be dated N ovem ber 16, 1970, and will bear interest from th a t date a t th e rate of 6 3A percent p er annum , payable on a sem i-annual basis on M ay 15 and N ovem ber 15, 1971, and M ay 15, 1972. T h ey will m ature M ay 15, 1972, and will not be subject to call for redem ption prior to m aturity. 2. T he income derived from the notes is subject to all taxes im posed under the Intern al R evenue Code of 1954. T he notes are subject to estate, inheritance, gift or other excise taxes, w hether Federal or State, b u t are exem pt from all taxation now or hereafter im posed on th e principal or interest thereof by any State, or any of the possessions of th e U nited States, or by any local taxing authority. 3. T h e notes will be acceptable to secure deposits of public moneys. T hey will not be acceptable in paym ent of taxes. 4. B earer notes w ith interest coupons attached, and notes registered as to principal and interest, will be issued in denom ina tions of $1,000, $5,000, $10,000, $100,000 and $1,000,000. Provision will be m ade for the interchange of notes of different denom i nations and of coupon and registered notes, and for the transfer of registered notes, under rules and regulations prescribed by the Secretary of the T reasury. 5. T he notes will be subject to the general regulations of the T reasury D epartm ent, now or hereafter prescribed, governing U nited S tates notes. < III. TENDERS AND ALLOTMENTS TIME, THURSDAY, NOVEMBER 1. T enders will be received a t F ederal R eserve B anks and Branches and a t the Office of the T reasurer of the U nited States, W ashington, D C. 20220, up to th e closing hour, one-thirty p.m., E astern Standard Tim e, T hursday, N ovem ber 5, 1970. E ach tender m ust state the face am ount of notes bid for, which m ust be $1,000 or a m ultiple thereof, and th e price offered, except th a t in th e case of noncom petitive tenders th e term “noncom petitive” should be used in lieu of a price. In th e case of com petitive tenders, th e price m ust be expressed on th e basis of 100, w ith two decim als e.g., 100.00. T enders a t a price less th a n 99.76 will n o t be accepted. F rac tions m ay not be used. N oncom petitive tenders from any one bidder m ay not exceed $200,000. I t is urged th a t tenders be m ade on the printed forms and forwarded in th e special envelopes m arked “T ender for T reasury N otes”, which will be supplied by F ederal R eserve B anks on application therefor. 2. Com m ercial banks, which for this purpose are defined as banks accepting dem and deposits, m ay subm it tenders for account of custom ers provided th e nam es of th e customers are set forth in such tenders. O thers th an com mercial banks will n ot be p er m itted to subm it tenders except for th e ir own account. T enders will be received w ithout deposit from banking institutions for th eir own account, Federally-insured savings and loan associations, States, political subdivisions or instrum entalities thereof, public pension and retirem ent and other public funds, international organizations in which th e U nited S tates holds m em bership, foreign central banks and foreign States, dealers who m ake prim ary m arkets in G overnm ent securities and report daily to the Federal R eserve B ank of New Y ork th eir positions w ith respect to G overnm ent securities and borrowings thereon, and G overnm ent accounts. T enders from others m ust be accom panied by paym ent (in cash or 5 p ercent T reasury N otes of Series A-1970 which will be accepted a t p ar) of 5 percent of th e face am ount of notes applied for. 3. Im m ediately after the closing hour tenders will be opened, following which public announcem ent will be m ade by the T reasury D epartm ent of the am ount and price range of accepted bids. Those subm itting tenders will be advised of the acceptance or rejection thereof. In considering the acceptance of tenders, th e highest prices offered will be accepted in full down to the am ount required, and if the same price appears in two or more tenders, and it is necessary to accept only a p a rt of the am ount offered at such price, th e am ount accepted a t such price will be prorated in accordance w ith the respective am ounts applied for. T he Secretary of the T reasury expressly reserves the right to accept or reject any or all tenders, in whole or in part, and his action in any such respect shall be final. S ubject to these reservations, noncom petitive tenders for $200,000 or less w ithout stated price from any one bidder will be accepted in full a t the average price* (in two decim als) of accepted com petitive tenders. 4. All bidders are required to agree not to purchase or to sell, or to m ake any agreem ents w ith respect to the purchase or sale or other disposition of any notes of this issue a t a specific ra te or price, un til after one-thirty p.m., E astern S tandard T im e, Thursday, N ovem ber 5, 1970. 5. Comm ercial banks in subm itting tenders will be required to certify th a t they have no beneficial interest in any of the tenders they enter for the account of th e ir customers, and th a t their customers have no beneficial interest in th e banks* tenders for th eir own account. IV. PAYMENT 1. S ettlem ent for accepted tenders in accordance w ith th e bids m ust be m ade or com pleted on or before N ovem ber 16, 1970, a t th e F ederal R eserve B ank or B ranch or a t the office of th e T reasurer of th e U nited States, W ashington, D. C. 20220, in cash, 5 percent T reasury N otes of Series A-1970 (in terest coupons dated N ovem ber 15, 1970 should be detached) or other funds im m e. diately available by th a t date. P ay m ent will not be deem ed to have been com pleted w here registered notes are requested if the appropriate identifying num ber as required on tax returns and other docum ents subm itted to the Internal R evenue Service (an individual’s social security num ber or an em ployer identification num ber) is not furnished. In every case w here full paym ent is n ot com pleted, th e paym ent w ith the tender u p to 5 percent of the am ount of notes allotted shall, upon declaration m ade by the Secretary of the T reasury in his discretion, be forfeited to th e U nited States. Any qualified depositary will be perm itted to m ake settlem ent by credit in its T reasury T ax and Loan A ccount for n ot more than 50 percent of notes allotted to it for itself and its customers. W hen paym ent is m ade w ith notes of Series A-1970, a cash adjustm ent will be m ade to or required of the bidder for any difference betw een th e face am ount of notes subm itted and th e am ount payable on th e notes allotted. V. ASSIGNMENT OF REGISTERED NOTES 5, 1970 1. R egistered notes tendered as deposits and in paym ent for notes allotted hereunder should be assigned by th e registered payees or assignees thereof, in accordance w ith the general regulations of the T reasury D epartm ent, in one of the form s hereafter set forth. N otes tendered in paym ent should be surrendered to a Federal R eserve B ank or B ranch or to the Office of th e T reasurer of the U nited States, W ashington, D. C. 20220. T h e m aturing notes m ust be delivered a t th e expense and risk of th e holder. If th e new notes are desired registered in th e same nam e as the notes surrendered, the assigm ent should be to “T he Secretary of the T reasury for 6% percent T reasury N otes of Series D -1972”; if th e new notes are desired registered in another name, th e assignm ent should be to “T h e Secretary of the T reasury for 6 % percent T reasury N otes of Series D-1972 in the nam e of ”; if new notes in coupon form are desired, th e assignm ent should be to “T h e Secretary of the T reasury for 6% percent T reasury N otes of Series D-1972 in coupon form io be delivered to __________________________ ”. VI. GENERAL PROVISIONS 1. As fiscal agents of the U nited States, F ederal R eserve B anks are authorized and requested to receive tenders, to m ake such allotm ents as m ay be prescribed by the Secretary of th e T reasury, to issue such notices as m ay be necessary, to receive paym ent for and m ake delivery of notes on full-paid tenders allotted, and they m ay issue interim receipts pending delivery of th e definitive notes. 2. T he Secretary of the T reasury m ay a t any tim e, or from tim e to tim e, prescribe supplem ental or am endatory rules and regulations governing the offering, which will be com m unicated prom ptly to th e F ederal R eserve Banks. C H A R L S E. W A LK ER, A cting Secretary of th e T reasury. ♦A v e ra g e p rice m ay be a t, or m ore o r less th a n 100.00. (S ee reverse for ten d er form ) ’
@FedFRASER