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FE D E RA L R E SE R V E BANK O F NEW YORK Fiscal A g en t o f the U nited States r Circular No. 4 5 1 8 1 L October 17, 1957 J FNMA CASH FINANCING To all Banking In stitution s, and Others Concerned, in the Second Federal R eserve D istrict: The following statement was made public today: The Treasury Department announced today that on Monday, October 21, the Secretary o f the Treasury on behalf of the Federal National M ortgage Association will offer fo r cash subscription at par $750 million o f 4 % percent M L (Management and Liquidating) Notes o f the Association to be dated October 29, 1957, and to mature June 26, 1958. The books will be open for one day, on October 21. A s announced by the Association on October 15, 1957, the Treasury Department has agreed to handle this offering for the Association and it will utilize the facilities o f the Federal Reserve Banks, as fiscal agents o f the United States, in receiving subscriptions, making allotments, and delivering securities allotted in much the same manner as public debt offerings are handled. Subscriptions from commercial banks, which fo r this purpose are defined as banks accepting demand deposits, for their own account, w ill be received without deposit, but will be restricted in each ease to an amount not exceeding one-half o f the combined capital, surplus and undivided profits o f the subscribing bank. On all other subscriptions a payment o f 2 percent o f the amount o f notes subscribed fo r must be made, not subject to withdrawal until after allotment. Although payment by Treasury Tax and Loan account credit will not be permitted, arrange ments have been made between the Association and the Treasury whereby the Treasury will deposit with qualified banks, upon request, amounts equal to notes allotted to such banks fo r themselves and their customers. This is the same procedure followed in January 1955 in connection with the sale o f the earlier issue o f Series ML notes. Commercial banks and other lenders are requested to refrain from making unsecured loans or loans collateralized in whole or in part by the notes subscribed fo r, to cover the 2 percent deposits required to be paid when subscriptions are entered. A certification by the subscribing bank that no such loan has been made will be required on each subscription entered by it fo r account o f its customers. A certification that the bank has no beneficial interest in its custom ers’ subscriptions, and that no customers have any beneficial interest in the bank’s own subscription, w ill also be required. A n y subscription addressed to a Federal Reserve Bank or Branch, or to the Treasurer o f the United States, and placed in the mail before midnight, October 21, will be considered as timely. Subscription forms for the offering will be mailed to reach you on Monday, October 21. Please note that the subscription books will be open for only on e day, October 21. A lfred H ayes, President.
@FedFRASER