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F E D E R A L R E S E R V E B A * O F MEW Y O R K Fiscal Agent o f the United States Circular No. 10,002 February 12, 1986 OFFERING OF TWO SEMES OF TREASURY BILES $6,800,000,000 off 91-Day Bills, To Be Issued February 20, 1986, Due May 22, 1986 $6,800,000,00© off 182-Day Bills, T o Be Issued February 20, 1986, Due August 21, 1986 To A ll Banking Institutions, and Others Concerned, in the Second Federal Reserve District: Following is the text o f a notice issued by the Treasury Department: The Department of the Treasury, by this public notice, invites tenders for two series of Treasury bills totaling approximately $13,600 million, to be issued February 20, 1986. This offering will result in a paydown for the Treasury of about $1,100 million, as the maturing bills are outstanding in the amount of $14,704 million. Tenders will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D.C. 20239, prior to 1:00 p.m., Eastern Standard time, Tuesday, February 18, 1986. The two series offered are as follows: 91-day bills (to maturity date) for approximately $6,800 million, representing an additional amount of bills dated November 21, 1985, and to mature May 22, 1986 (CUSIP No. 912794 KG8), currently outstanding in the amount of $7,466 million, the addi tional and original bills to be freely interchangeable. 182-day bills for approximately $6,800 million, to be dated February 20, 1986, and to mature August 21, 1986 (CUSIP No. 912794 LAO). The bills will be issued on a discount basis under competitive and non competitive bidding, and at maturity their par amount will be payable without interest. Both series of bills will be issued entirely in book-entry form in a minimum amount of $10,000 and in any higher $5,000 multiple, on the records either of the Federal Reserve Banks and Branches, or of the Department of the Treasury. The bills will be issued for cash and in exchange for Treasury bills maturing February 20, 1986. In addition to the maturing 13-week and 26-week bills, there are $8,525 million of maturing 52-week bills. The disposition of this latter amount was announced last week. Tenders from Federal Reserve Banks for their own account and as agents for foreign and international monetary authorities will be accepted at the weighted average bank discount rates of accepted competitive tenders. Additional amounts of the bills may be issued to Federal Reserve Banks, as agents for foreign and international monetary authorities, to the extent that the ag gregate amount of tenders for such accounts exceeds the aggregate amount of maturing bills held by them. For purposes of determining such additional amounts, foreign and international monetary authorities are considered to hold $2,048 million of the original 13-week and 26-week issues. Federal Reserve Banks currently hold $2,173 million as agents for foreign and international monetary authorities, and $5,670 million for their own account. These amounts represent the combined holdings of such accounts for the three issues of maturing bills. Tenders for bills to be maintained on the book-entry records of the Department of the Treasury should be submitted on Form PD 4632-2 (for 26-week series) or Form PD 4632-3 (for 13-week series). Each tender must state the par amount of bills bid for, which must be a minimum of $10,000. Tenders over $10,000 must be in multiples of $5,000. Competitive tenders must also show the yield desired, expressed on a bank discount rate basis with two decimals, e.g., 7.15%. Fractions may not be used. A single bidder, as defined in Treasury’s single bidder guidelines, shall not submit noncompetitive tenders totaling more than $1,000,000. Banking institutions and dealers who make primary markets in Govern ment securities and report daily to the Federal Reserve Bank of New York their positions in and borrowings on such securities may submit tenders for account of customers, if the names of the customers and the amount for each customer are furnished. Others are only permitted to submit tenders for their own account. Each tender must state the amount of any net long position in the bills being offered if such position is in excess of $200 million. This information should reflect positions held as of 12:30 p.m., Eastern time, on the day of the auction. Such positions would include bills acquired through “when issued” trading, and futures and forward transac tions as well as holdings of outstanding bills with the same maturity date as the new offering, e.g., bills with three months to maturity previously offered as six-month bills. Dealers, who make primary markets in Govern ment securities and report daily to the Federal Reserve Bank of New York their positions in and borrowings on such securities, when submitting tenders for customers, must submit a separate tender for each customer whose net long position in the bill being offered exceeds $200 million. A noncompetitive bidder may not have entered into an agreement, nor make an agreement to purchase or sell or otherwise dispose of any non competitive awards of this issue being auctioned prior to the designated closing time for receipt of tenders. Payment for the full par amount of the bills applied for must accom pany all tenders submitted for bills to be maintained on the book-entry records of the Department of the Treasury. A cash adjustment will be made on all accepted tenders for the difference between the par payment submitted and the actual issue price as determined in the auction. No deposit need accompany tenders from incorporated banks and trust companies and from responsible and recognized dealers in invest ment securities for bills to be maintained on the book-entry records of Federal Reserve Banks and Branches. A deposit of 2 percent of the par amount of the bills applied for must accompany tenders for such bills from others, unless an express guaranty of payment by an incorporated bank or trust company accompanies the tenders. Public announcement will be made by the Department of the Treasury of the amount and yield range of accepted bids. Competitive bidders will be advised of the acceptance or rejection of their tenders. The Secretary of the Treasury expressly reserves the right to accept or reject any or all tenders, in whole or in part, and the Secretary’s action shall be final. Sub ject to these reservations, noncompetitive tenders for each issue for $1,000,000 or less without stated yield from any one bidder will be ac cepted in full at the weighted average bank discount rate (in two decimals) of accepted competitive bids for the respective issues. The calculation of purchase prices for accepted bids will be carried to three decimal places on the basis of price per hundred, e.g., 99.923, and the determinations of the Secretary of the Treasury shall be final. Settlement for accepted tenders for bills to be maintained on the bookentry records of Federal Reserve Banks and Branches must be made or completed at the Federal Reserve Bank or Branch on the issue date, in cash or other immediately-available funds or in Treasury bills maturing on that date. Cash adjustments will be made for differences between the par value of the maturing bills accepted in exchange and the issue price of the new bills. In addition, Treasury Tax and Loan Note Option Depositaries may make payment for allotments of bills for their own accounts and for account of customers by credit to their Treasury Tax and Loan Note Accounts on the settlement date. In general, if a bill is purchased at issue after July 18, 1984, and held to maturity, the amount of discount is reportable as ordinary income in the Federal income tax return of the owner at the time of redemption. Accrual-basis taxpayers, banks, and other persons designated in section 1281 of the Internal Revenue Code must include in income the portion of the discount for the period during the taxable year such holder held the bill. If the bill is sold or otherwise disposed of before maturity, the por tion of the gain equal to the accrued discount will be treated as ordinary income. Any excess may be treated as capital gain. Department of the Treasury Circulars, Public Debt Series—Nos. 26-76 and 27-76, Treasury’s single bidder guidelines, and this notice prescribe the terms of these Treasury bills and govern the conditions of their issue. Copies of the circulars, guidelines, and tender forms may be obtained from any Federal Reserve Bank or Branch, or from the Bureau of the Public Debt. This Bank will receive tenders for both series prior to 1:00 p .m ., Eastern Standard time, Tuesday, February 18, 1986, at the Securities Department o f its Head O ffice and at its B u ffalo Branch. Tender forms for both series are enclosed. Please be sure to use them to submit tenders and return them in the enclosed envelope. Form s for submitting tenders directly to the Treasury are available from the Government Bond Division o f this B an k. Tenders not requiring a deposit may be submitted by telegraph, subject to written confirm ation; no tenders may be submitted by telephone. Settlem ent must be made in cash or other immediately available funds or in Treasury securities maturing on or before the issue date. Treasury T ax and L oan Note O ption Depositaries may m ake payment for Treasury bills by credit to their Treasury Tax and L oan Note A ccounts. Results o f the last weekly offering are shown on the reverse side o f this circular. E. GERALD C o r r ig a n , President. Please note that the auction will be held Tuesday, February 18, 1986. (OVER) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED FEBRUARY 13, 1986) RANGE 0? ACCiPfga competitive bidis IS^week bill© M ^ r i n s M a v l X 1381 Discount Invtafeaent l£]fe® Rata 1/ .Pries 7.1?% 7.18% 7.18E Low High Average 7.401 7.41% 7.41% M ile m aturing August 14, 1986 &iscount Investment Seta Price Bate 1./ s 8 09 1f 98,188 ■ 7.22% 96,185 ! 7*23% 98*185 1 7*23% 7.60% 7.61% 7*61% 9 6 .ISO $6.34$ 96*341 Tender® at fch® high difccount m e for fcfoi 13-week b i l l s wet® a llo tte d 67%* Tend©t® the high di^eount m e lor the 26-week b i l l s were a llo tte d 68%, TETORS RECEIVED AND ACCEPTED (In T h o u s a n d i) Revived Acc^nttd Received Accepted ®6»f?0 21 ,811,635 26,830 44,360 80,860 50,620 1,647,060 95,135 10,320 78,990 31,425 103!9048S 363,950 $ 36,870 6,085,760 26,830 42,300 10,860 38,220 83,060 S4.970 14,320 54,295 29,425 147,805 363,950 ?$ 67,725 1 19,847,510 20,443 33,030 ! 61*815 ? 135,155 § i ,535,940 1 ! 91,470 51,230 46p190 29,105 * l,181,031 t 398*255 $ 33,725 9,973,125 20,445 33.030 10,715 91.160 179,460 46,470 15*230 46,190 22,505 1068835 398.25S $15s§®J,260 $?s02©,36S * m ,498,905 §7,017,143 M m $22 *521,620 Conpttltlve H©ne©ap@tlfeiv© 1.154.425 Subtotal? Public $33^676 045 $3,814,725 1,154,425 WiolSTTM * $200120,195 * 1.016*410 * §21,136,605 Legation !®§t©n fc^j ferk Philadelphl. Cleveland Ushscnd Atlanta Chicago It Louis Minneapolis Kansu City B»U»a Ian Ftaneioe® Tgmmty $ a TOTALS TOTALS U E q u iv s ls n t 0 * 4 9 lg761fl?l5 1,781(715 i 1,700,000 13*08*435 1.016.410 T C s h Im ! 1,700,000 ^OT^IOO 207,500 ! 682,300 662,300 $23,661,210 $7,028,365 ! §23,491,905 $7,017,145 j> fad@r©i Reserve Foreign Official Institutions i . e © u p £ H l0 @ u ® y ie ld ?
@FedFRASER