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FEDERAL RESERVE BANK OF N E W YORK Fiscal Agent of the United States [c C i r c u l a r N o . 653 A p r il 29, 197 0 To A ll B anking I n s titu tio n s , and O thers C oncerned, in the Secon d F ed era l R e s e r v e D is tr ic t: The following statement was made public today by the Treasury Department: TREASURY ANNOUNCES $16.6 BILLION REFUNDING AND $3.5 BILLION NEW CASH OFFERING The Treasury announced today that it is offering holders of the $16.6 billion of 5-5/8% Treasury Notes of Series B-1970 and 6-3/8% Treasury Notes of Series C-1970, maturing May 15, 1970, the right to exchange their holdings for a 3-year 7-3/4% Treasury note or a 6-year 9-m onth8% Treasury note. The public holds about $4.9 billion of the notes eligib le for exchange, and about $11.7 billion is held by Government accounts and Federal R eserve Banks. In addition the Treasury w ill borrow $3.5 billion, or thereabouts, through the issuance of an 18-month 7-3/4% Treasury note to be dated May 15, 1970, and to mature November 15, 1971, at 99.95 (to yield about 7.79%). In addition to the amount offered to the public an additional amount of the 18-month notes will be allotted to Government accounts and Federal R eserve Banks. EXCHANGE OFFERING The notes now being offered are: an additional amount of the 7-3/4% Treasury Notes of Series A-1973, dated October 1, 1969, due May 15, 1973, at 99.40 (to yield about 7.98%); and an additional amount of the 8% Treasury Notes of Series A-1977, dated February 15, 1970, due February 15, 1977, at par and accrued interest from February 15, to May 15, 1970 ($19.66851 per $1,000). There are now outstanding $1,157 million of the 7-3/4% notes and $1,856 m illion of the 8% notes. The books for the receipt of subscriptions in the exchange offering will be open for three days, May 4 through May 6. The payment and delivery date for the notes w ill be May 15, 1970. Cash subscriptions for the Series A-1973 and A-1977 notes w ill not be accepted. Sub scriptions addressed to a Federal Reserve Bank or Branch, or to the Office of the T reasurer of the United States, and placed in the mail before midnight, May 6, will be considered as tim ely. Interest will be payable on the Series A-1973 notes semiannually on November 15, 1970, and thereafter on May 15 and November 15 until maturity. Interest will be payable on the 8% notes on a semiannual b asis August 15, 1970, and thereafter on February 15 and August 15 until maturity. CASH OFFERING - 18-Month Notes Payment for the 18-month notes may be made in cash, or in 5-5/8% notes or 6-3/8% notes maturing May 15, which will be accepted at par, in payment, in whole or in part,for the notes subscribed for, to the extent such subscriptions are allotted by the Treasury. Pay ment by credit in Treasury Tax and Loan Accounts may be made for 50% of the amount of notes allotted. (Over) The books for the receipt of subscriptions for the 18-month notes will be open one day only, Tuesday, May 5. Subscriptions addressed to a Federal R eserve Bank or Branch, or to the Office of the Treasurer of the United States, and placed in the mail before midnight, May 5, w ill be considered as tim ely. Subscriptions from com m ercial banks, for their own account, w ill be restricted in each case to an amount not exceeding 50 percent of the combined capital (not including capital notes or debentures), surplus and undivided profits of the subscribing banks. Subscriptions from com m ercial and other banks for their own account, Federally-insured savings and loan association s, States, political subdivisions or instrum entalities thereof, public pension and retirem ent and other public funds, international organizations in which the United States holds membership, foreign central banks and foreign States, and dealers who make prim ary markets in Government secu rities and report daily to the Federal R eserve Bank of New York their positions with respect to Government secu rities and borrowing there on, w ill be received without deposit. Subscriptions from all others must be accompanied by payment of 10% (in cash, or T reasury notes maturing May 15, 1970, at par) of the amount of notes applied for not subject to withdrawal until after allotment. The Secretary of the Treasury rese rv e s the right to reject or reduce any subscription, to allot le s s than the amount of notes applied for, and to make different percentage allotm ents to various c la ss e s of subscrib ers. Subject to these reservations, subscriptions in amounts up to and including $200,000 w ill be allotted in full and subscriptions over $200,000 w ill be allotted on a percentage b a sis but not le s s than $200,000. All subscribers are required to agree not to purchase or to se ll, or to make any ag ree ments with respect to the purchase or sale or other disposition of any of the notes subscribed for under this offering at a sp ecific rate or price, until after midnight, May 5, 1970. Com m ercial banks in submitting subscriptions will be required to certify that they have no beneficial interest in any of the subscriptions they enter for the account of their custom e r s, and that their custom ers have no beneficial in terest in the banks' subscriptions for their own account. EXCHANGE AND CASH OFFERINGS The notes will be made available in registered as well as bearer form. All subscribers requesting registered notes w ill be required to furnish appropriate identifying numbers as required on tax returns and other documents submitted to the Internal Revenue Service. Coupons dated May 15, 1970, on notes tendered in exchange or payment should be de tached and cashed when due. The May 15, 1970 in terest due on registered notes will be paid by issu e of interest checks in regular course to holders of record on April 15, 1970, the date the transfer books closed. The official offering circu lars and subscription form s for this offering w ill be mailed to reach you by Monday, May 4; however, if they do not reach you by that date, subscriptions may be entered by telegram or letter, subject to confirmation on the form s provided. Alfred Hayes, President.
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