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FEDERAL RESERVE BANK OF MEW YORK
Fiscal Agent of the United States
Circular N o. 1©,Q20
April 2, 1986
OFFERING OF TWO SERIES OF TREASURY BILLS
SY9 ©s,®(Q)©9©{OK®off 91-Bny Bills, T© 1© taa©$ April 1®, 19865 KDm©July 1®, 19S6
$79®®®?®®®?®®®©if 182-Bay Bills, T© B© Issunei April 1®, 1986, Dm© CD©tolb©ir 9, 1986
To A ll 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 $14,000 million, to
be issued April 10, 1986. This offering will result in a paydown for the
Treasury of about $450 million, as the maturing bills are outstanding in
the amount of $14,451 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, April 7, 1986. The two series offered are as follows:
91-day bills (to maturity date) for approximately $7,000 million,
representing an additional amount o f bills dated July 11, 1985,
and to mature July 10, 1986 (CUSIP No. 912794 KN3), currently
outstanding in the amount of $15,971 million, the additional and
original bills to be freely interchangeable.
182-day bills for approximately $7,000 million, to be dated April 10,
1986, and to mature October 9, 1986 (CUSIP No. 912794 LF9).
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 April 10,1986. 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 aggregate amount of tenders for such ac
counts exceeds the aggregate amount of maturing bills held by them.
Federal Reserve Banks currently hold $676 million as agents for foreign and
international monetary authorities, and $3,297 million for their own ac
count. 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 o f 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 o f any non
competitive awards o f this issue being auctioned prior to the designated
closing time for receipt o f 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
o f 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 o f 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 o f bills for their own
accounts and for account o f 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 o f 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, April 7, 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 APRIL 3, 1986)
UMQE OF ACCEPTED
19-week bills
m
t
m
i
m
July 3* 1986
COKPETXTIVg BIBS?
Bi®e©unt
Low
High
Average
:
t
late
Inv^staent
Sat* M
Price
t
6.12%
6■36%
6e35%
6*51%
6*56%
6.54%
98.402
98.392
98.395
l
t
t
1
2<b-m®k bills
©aturini October 2* 1986
Discount Investment
Rst®
Rate 1/ ?ri©e
6.30?i 8/
6*33%
6*32%
6.603
6.63*
6.62%
9 6 . BIB
96,800
96.805
a/ Excepting 1 tender o£ $1,000,000,
fenders it the high diicount rate for the 13-week bills ^tr® allotted 19%,
Tendars at the high discount rate for the 26owtsk bill© weti allotted 77%.
TENDERS RECEIVED AND ACCEPTED
Location
Boston
Hew York
Phi lad elp hi a
C l t v g li a d
Riet®©nd
Atlan ta
6hl©©go
St* Louig
Kinneapolig
Kansas City
D a l la s
Sen Fr aneiico
Treasury
Toms
Mi
Cespetiiivt
lose©apatitiv©
Subtotals Public
Pad^ral Reserve
Foreign O f f i c i i !
Institutions
TOTALS
U
Ete®iv©d
(In Thoustndg)
s
Accepted
Received
Acceptsd
39,580
6*160,055
28*830
44,720
41* 295
36,475
95,330
51,390
16,085
49,510
33,805
120,570
305*410
: $
31,170
} 1 6, 695 ,7 30
a
14,795
24*835
:
44,775
?
35,640
1 g4 7 1 B035
?
72,455
;
13,270
39,000
s
o
26,790
1,308,135
\
ft
388,305
$
$26,683,225
$7,025,055
l $ 2 0 ,1 6 5 ,9 3 5
$7 ,0 02 ,2 35
$23,691,6 40
1,039,175
$2 4 ,7 30 ,8 1 5
$4,033,470
1*039*175
$5,072,645
$ 1 7 ,2 5 8 ,0 4 5
898,490
0 $18,156,535
$4,094,345
898*490
$4,992,835
1,796,710
3,796,710
155*700
$26,683,225
155,700
$ 7 025 P055
$
39,580
22,945,910
28,830
44,720
4 1 ,2 9 5
38,475
1,631,380
51,390
16,085
49,913
42,855
1 ,4 2 7 ,3 8 0
305,410
E^u iv ile nt ceupon-iiiue y i e l d 0
$
»
5
0
0
*
9
*
D
•
0
31,170
5,804 ,53 0
14*795
24*035
44,775
35*640
347*035
46,453
13*270
39*000
21, 79 0
190*635
388*305
S
1,500 ,0 00
1*500*000
a
509,400
$ 2 0 ,1 6 5 ,9 3 5
509,400
$7 ,0 0 2 ,2 3 5
<3
i
@FedFRASER