Full text of Federal Reserve Bank of New York Circulars : 10022. Offering of Two Series of Treasury Bills

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FEDERAL RESERVE BANK OF WEW YORK
Fiscal A gent o f the U nite d States
Circular No. 10,022
April 9, 19B6

OFFERING OF TWO SERIES OF TREASURY BILLS
$7,©TO,®©©,©©© off 91=Ogiy Bills, Xo Be Issued A pril 17, 1986, D ue July 17, 1986
$7,TO©,®®®,®®© off 182-Bay Bills, To Be Issued A pril 17, 1986, D ue O ctober 16, 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 $14,000 million, to
be issued April 17, 1986. This offering will result in a paydown for the
Treasury of about $15,575 million, as the maturing bills are outstanding
in the amount of $29,580 million (including the 14-day cash management
bills issued April 3, 1986, in the amount of $15,030 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 14, 1986. The two series offered are as
follows:
91-day bills (to maturity date) for approximately $7,000 million,
representing an additional amount of bills dated January 16,
1986, and to mature July 17, 1986 (CUSIP No. 912794 KW 3),
currently outstanding in the amount of $7,660 million, the addi­
tional and original bills to be freely interchangeable.
182-day bills for approximately $7,(XX) million, to be dated April 17,
1986, and to mature October 16, 1986 (CUSIP No. 912794 LG7).
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 17, 1986. In addition to the maturing 13-week and 26-week
bills, there are $8,362 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 aggregate 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 interna­
tional monetary authorities are considered to hold $2,132 million of the
original 13-week and 26-week issues. Federal Reserve Banks currently hold
$2,257 million as agents for foreign and international monetary authorities,
and $5,510 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 Depart­
ment 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,OCX). 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 o f 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, Monday, April 14, 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. G e r a l d C o r r ig a n ,

President.
(OVER)

RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS
(TWO SERIES TO BE ISSUED APRIL 1®, 1986)

EAM68 OF ACCEg?g&
COMPETITIVE 81081
h@w
U gh

AvoragQ

Mila

bills
jO j. 1996
D is c o u n t

la v

6.16%
6,20%
6.19%

-M L iL
@.34%
$.39%
6.381

fQ^dgi?Q ££ £lh@

fflM lM A lL o M E

!
91.443 3
91.433 >
1

liAeg

dltcoysit sata

B is e & u & g

..Rats

9.

1 98 6

* - -------------- --

.. Hq^q

6.158a/
6.1MT
6,17%

6.44X
s .m
6.46*

y

F?iC«
% ,m
m*

J3~w«@k M i l s v e r t ell©£g©d
&1 lo tu d

?@pd®^s » | gbe h i g h discount m s i @ f iho I6»we«3k b ills
TENDERS KSCEIVED 4NB ACCEPTED

location
!@tk
FhilalaXphi®
€t@vtlani
Hiehaond
At lints
€h£@Gga
Its Louis
Mlnnsspolls
Rangis C££$
D«Um
1m F?Gfle£§e©
Tia«y?y
TOTAll

Jtecaived
$
46,733
21,047,820
23„4®S
SQ,«5
46,90S
31,250
1.719,873
70e125
16,920
30,410
44,010
l076M2O
56§„7?Q
$23,310)330

Yai
$22)287,900
Cotapstitivt
Hene©if»#tliiv«
= h M h M
Subtotal* ?ublie $23049ltffs
ysdtral aGSGPVG
1*671,535
?9r®Xgn Official
Institutions
TOTAL*
y

Equiv&Xtni

$23,110,330
jUli*

(Zn Thousands)
Aceictad
i

HG€@£v ©|

Acetpttd

$ 44„23§
5,839*530
23,485
S0e4S5
46,185
46,256
211,915
42«i25
16,620
S0D410
34,880
m 0m
... 361.770
$7,014,920

! $
32,140
< 11,071,620
!
13,880
'
28,6§0
*
%i,m
1
71,355
* 1,323,150
i
71,420
1
15,890
i
44,360
!
31,609
* 1*331,890
' ___447.88$
‘ $21,721,415

$ 32Q@40
5,624,060
13,880
2s0^so
37,771
41»705
369,970
44,400
n,i9o
44,36Q
26,60©
301,890
447.885
17,016,005

$3,912,370
SjSOS.glS
15,198,363
1,671,331

I 111,711,000
1
937,115
! 119,725,113
* 19625,000

14,062,310
937.115
$5,019,703

®

$71,300
$7,016,008

145 n0Q0
$7,014,120

171,300

* $21,721,413

1,121,000

kn\