Full text of Federal Reserve Bank of New York Circulars : 10013. Offering of Two Series of Treasury Bills

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FEDERAL RESERVE ®A EC ©F S^EW YORGt
W
Fiscal Agent of the United States
Circular No. 10,013
March 12, 1986

OFFERING OF TWO SERIES OF TREASURY FILLS
$$,800,000,00® © 91-Day B its, T© B© Issued March 2®, 1986, One Jem© 19, 1986
ff
$6,800,®®®,®®® ©f 182-Day Bills, T© B© Issued Marefe 2®, 1986, Due September 18, 1986
To All Banking Institutions, and Others Concerned,
in the Second Federal Reserve District:

Following is the text of 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 March 20, 1986. This offering will result in a paydown for the
Treasury of about $1,250 million, as the maturing bills are outstanding in
the amount of $14,861 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,
Monday, March 17, 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 December 19,
1985, and to mature June 19, 1986 (CUSIP No. 912794 KL7),
currently outstanding in the amount of $7,624 million, the addi­
tional and original bills to be freely interchangeable.
182-day bills for approximately $6,800 million, to be dated
March 20, 1986, and to mature September 18, 1986 (CUSIP No.
912794 LD4).
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 March 20, 1986. In addition to the maturing 13-week and
26-week bills, there are $8,529 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 $1,844 million of the original 13-week and 26-week
issues. Federal Reserve Banks currently hold $2,044 million as agents for
foreign and international monetary authorities, and $5,751 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,(X ) must be in multiples of $5,000.
X
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,(XX),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, Monday, March 17, 1986, at
the Securities Department of its Head Office and at its Buffalo Branch. Tender forms for both series are enclosed. Please be
sure to use them to submit tenders and return them in the enclosed envelope. Forms for submitting tenders directly to the
Treasury are available from the Government Bond Division of this Bank. Tenders not requiring a deposit may be submit­
ted by telegraph, subject to written confirmation; no tenders may be submitted by telephone. Settlement must be made in
cash or other immediately available funds or in Treasury securities maturing on or before the issue date. Treasury Tax
and Loan Note Option Depositaries may make payment for Treasury bills by credit to their Treasury Tax and Loan Note
Accounts.
Results of the last weekly offering are shown on the reverse side of this circular.
E . GERALD CORRIGAN,

President.
(OVER)

RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS
(TWO SERIES TO BE ISSUED MARCH 13, 1986)

26-irnk Mila
13-weik Mile
s
OF ACCEPTEB
1, 1986
maturing June I 2 a 1986
t maturing Snptamber 1
,rmvE ix0g!
ieuf
l S i e n c Investment
lvifisf
attfiic
Oi§s©unt
Price
nets u
lot©
E f @ 1 Pr£gd i Etta
sc /
1 *?
.0
6*341
96.694
§*n%
§,§61
98*$47 1 §»$4^
High

Average

ioSSI

a.ssx

b,75%

6 . 75%

f s ^ ? s £h@ high discount rate
ai©® t
Tend®?® a the high discount fate
t

9ioS44 ? 1*541
98,344 s 6.54g

tm

6.862
6,88%

%o6§4
96.694

t e 13«week bill® m m aUefetsd
h
t
he
bills ? @ @ alletted
s?

TBTOBai MQEOT1B 4» ACCEPTS®
C i Thousanda)
S
lQ©di^
fe©vd
tc4e
A&e©@£@d
to£@n
Philadelphia
flVl!
§0@S$
!S©to©s^
Atlanta
Chinag©
I o Louii
t
Minneapolis
taisse City
Dallas
Ion f ’
ganeioe©
fetasury
TOTALS

1
32,393
21,526*635
330*625
41,195
112,975
43*565
1,615*030
84,03s
40*110
56&
32©
40,015
l*34?s 45
3
323o 5
10
123,393,795

Mas,
Compitltiv®
122,360,445
1*041*820
Noncompetitive
iubtotnlf Mile TOfctHJ
S 833,730
„
Federal i e a v
tsr®
Foreign Official
Xa§£ituti@n®
347,100
TOTALS
$21,393,793
1 Equivalent eeugea^iseus yields
/

$ 32,393
6,016,235
30*625
37,140
40*475
39,965
MoS30
54*425
13,400
56,320
30*015
78,275
323,150
16,80S,970

«
a

$
30,515
i 22*466*350
«
u D ®
m
0
O
s 0m
o
<
3
42*625
#
O
I0O
600
i 1*557*441
s
17*605
0
D
37,140
0
0
466 9
10
G
S08
140
i
685,520
i
309*600
§ $25,662,005

$ 30,315
6o 9S0
O?30
1e
6 180
§5*995
SlB
i2l
30,450
60O
44S
4S,60S
1 o1 0
3 4
46B1 0
9
20,540
52*100
389,600
$6,848,065

$3,373,820
1,049,820
$4,455,640
1,835,730

i $22,307,560
s
901*843
i $23,309,405
§ l*750o
0©O

$3,485,620
f01*145
lostT®?
1,710,000

347*600
$6,108,970

i
702,300
s $25,662,005

702,100
$1,840,068