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F e d e r a l of R N e s e r v e ew Y B a n k ork Fiscal Agent of the United States r Circular No. 6 7 4 6 " 1 L June 17, 1971 J Auction of $21 Billion of 16^-Month Treasury Notes /4 To All Banking Institutions, and Others Concerned, in the Second Federal Reserve District: Following is the text of the details of the Treasury’s note auction announced in our Circular No. 6745, dated June 16, 1971: The $214 billion, or thereabouts, of lG^-month 6% Treasury Notes of Series F-1972 to be sold at auction under competitive and noncompetitive bidding will be issued on June 29, 1971, and mature November 15, 1972. The notes will be issued in registered and bearer form in denominations of $1,000, $5,000, $10,000, $100,000 and $1,000,000. Tenders for the notes will be received up to 1 :30 p.m., Eastern Daylight Saving time, Tuesday, June 22, 1971, at any Federal Reserve Bank or Branch and at the Office of the Treasurer of the United States, Wash ington, D. C. 20220. Tenders received after the clos ing hour will not be accepted. Each tender must be in the amount of $1,000 or a multiple thereof, and must state the price offered, if it is a competitive tender, or the term “ noncompeti tive,” if it is a noncompetitive tender. The price on competitive tenders must be expressed on the basis of 100, with two decimals, e.g., 100.00. Tenders at a price less than 99.76 will not be accepted. Fractions may not be used. The notation “ TENDER FOR T R E A SURY N O TE S” should be printed at the bottom of the envelope in which the tender is submitted. Public announcement will be made of the amount and price range of accepted tenders. Those submitting tenders will be advised of the acceptance or rejection thereof. The Secretary of the Treasury expressly re serves the right to accept or reject any or all tenders, in whole or in part, and his action in any such respect shall be final. Subject to these reservations noncom petitive tenders for $200,000 or less will be accepted in full at the average price (in two decimals) of accepted competitive tenders. This price may be 100.00, or more or less than 100.00. Commercial banks, which for this purpose are de fined as banks accepting demand deposits, may submit tenders for account of customers provided the names of the customers are set forth in such tenders. Others than commercial banks will not be permitted to submit tenders except for their own account. Tenders will be received without deposit from com mercial banks for their own account, Federally in sured savings and loan associations, States, political subdivisions or instrumentalities thereof, public pen sion and retirement and other public funds, inter national organizations in which the United States holds membership, foreign central banks and foreign States, dealers who make primary markets in Govern ment securities and report daily to the Federal Re serve Bank of New York their positions with respect to Government securities and borrowings thereon, and Government accounts. Tenders from others must be accompanied by payment of 5 percent of the face amount of notes applied for. Payment for accepted tenders must be completed on or before Tuesday, June 29, 1971, at the Federal Reserve Bank or Branch or at the Office of the Treasurer of the United States in cash or other funds immediately available to the Treasury by that date. Where full payment is not completed in funds available by the payment date, the allotment will be canceled and the deposit with the tender up to 5 percent of the amount of notes allotted will be subject to forfeiture to the United States. Nonbank investors should understand that their checks will constitute payment only if they are fully and finally collected by the payment date, Tuesday, June 29, 1971. Checks not so collected will subject the investor’s deposit to forfeiture as set forth in the preceding paragraph. A check payable other than at a Federal Reserve Bank received on the payment date will not constitute immediately available funds on that date. Accordingly, in order that a check will constitute immediately available funds to the Trea sury by the payment date, it should be submitted sufficiently in advance to assure completion of its col lection by Tuesday, June 29, 1971. Checks should be drawn to the order of the office to which the tender is submitted. If a check for the full amount of the payment is submitted with the subscription, it should be, in the case of tenders at a competitive price, equal to the total purchase price of the notes bid for, or, in the case of noncompetitive tenders, equal to the full face amount of the notes bid for. Bidders on a non competitive basis who submit checks for the face amount of the notes bid for will be (1) required to pay an additional amount if the purchase price is more than 100, or (2) paid the difference if the purchase price is less than 100. Commercial banks are prohibited from making un secured loans, or loans collateralized in whole or in part by the notes bid for, to cover the deposits re quired to be paid when tenders are entered, and they will be required to make the usual certification to that effect. Other lenders are requested to refrain from making such loans. All bidders are required to agree not to purchase or to sell, or to make any agreements with respect to the purchase or sale or other disposition of the notes bid for under this offering at a specific rate or price, until after 1:30 p.m., Eastern Daylight Saving time, Tues day, June 22, 1971. Any qualified depositary will be permitted to make settlement by credit in its Treasury tax and loan account for the amount of notes allotted to it for itself and its customers. The terms of this offering are set forth in Treasury Department Circular No. 5-71, Public Debt Series, a copy of which is printed on the following pages. This Bank will receive tenders up to 1:30 p.m., Eastern Daylight Saving time, Tuesday, June 22, 1971, at the Securities Department of its Head Office and at its Buffalo Branch. Please use the enclosed tender forms to submit tenders, and return them in the enclosed envelope marked “ Tender for Treasury Notes.” Tenders not requiring a deposit may be submitted by telegraph, subject to written confirmation; no tenders may be submitted by telephone. Settlement for accepted tenders may be made in cash or other immediately available funds, except that any qualified depositary may make settlement by credit in its Treasury Tax and Loan Account for the amount of notes allotted to it for itself and its customers. A lfred H a y e s , President. UNITED STATES OF AMERICA 6 PERCENT TREASURY NOTES OF SERIES F-1972 Dated and bearing interest from June 29, 1971 D E PAR TM EN T CIRCULAR Public Debt Series — No. 5-71 Due November 15, 1972 DEPARTMENT OF THE TREASURY Office of the Secretary, Washington, June 17,1971 I. OFFERING OF NOTES 1. The Secretary of the Treasury, pursuant to the authority of the Second Liberty Bond Act, as amended, invites tenders at a price not less than 99.76 percent of their face value for $2,250,000,000, or there abouts, of notes of the United States, designated 6 per cent Treasury Notes of Series F-1972. Tenders will be received up to 1 :30 p.m., Eastern Daylight Saving time, Tuesday, June 22, 1971. The notes will be issued under competitive and noncompetitive bidding, as set forth in Section III hereof. II. DESCRIPTION OF NOTES 1. The notes will be dated June 29, 1971, and will bear interest from that date at the rate of 6 percent per annum, payable on a semiannual basis on Novem ber 15, 1971 and May 15 and November 15, 1972. They will mature November 15, 1972, and will not be subject to call for redemption prior to maturity. 2. The income derived from the notes is subject to all taxes imposed under the Internal Revenue Code of 1954. The notes are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exempt from all taxation now or hereafter imposed on the principal or interest thereof by any State, or any of the possessions of the United States, or by any local taxing authority. 3. The notes will be acceptable to secure deposits of public moneys. They will not be acceptable in pay ment of taxes. 4. Bearer notes with interest coupons attached, and notes registered as to principal and interest, will be issued in denominations of $1,000, $5,000, $10,000, $100,000 and $1,000,000. Provision will be made for the interchange of notes of different denominations and of coupon and registered notes, and for the trans fer of registered notes, under rules and regulations prescribed by the Secretary of the Treasury. 5. The notes will be subject to the general regula tions of the Department of the Treasury, now or here after prescribed, governing United States notes. III. TENDERS AND ALLOTMENTS 1. Tenders will be received at Federal Reserve Banks and Branches and at the Office of the Treasurer of the United States, Washington, D. C. 20220, up to the closing hour, 1 :30 p.m., Eastern Daylight Saving time, Tuesday, June 22, 1971. Each tender must state the face amount of notes bid for, which must be $1,000 or a multiple thereof, and the price offered, except that in the case of noncompetitive tenders the term ‘ 'noncompetitive” should be used in lieu of a price. In the case of competitive tenders, the price must be expressed on the basis of 100, with two decimals, e.g., 100.00. Tenders at a price less than 99.76 will not be accepted. Fractions may not be used. Noncompetitive tenders from any one bidder may not exceed $200,000. It is urged that tenders be made on the printed forms and forwarded in the special envelopes marked ‘ ‘ Tender for Treasury Notes” , which will be supplied by Federal Reserve Banks on application therefor. 2. Commercial banks, which for this purpose are defined as banks accepting demand deposits, may sub mit tenders for account of customers provided the names of the customers are set forth in such tenders. Others than commercial banks will not be permitted to submit tenders except for their own account. Ten ders will be received without deposit from banking institutions for their own account, Federally-insured savings and loan associations, States, political subdivi sions or instrumentalities thereof, public pension and retirement and other public funds, international organ izations in which the United States holds membership, foreign central banks and foreign States, dealers who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York their positions with respect to Government securities and borrowings thereon, and Government accounts. Tenders from others must be accompanied by pay ment of 5 percent of the face amount of notes applied for. 3. Immediately after the closing hour tenders will be opened, following which public announcement will be made by the Department of the Treasury of the amount and price range of accepted bids. Those sub mitting tenders will be advised of the acceptance or rejection thereof. In considering the acceptance of tenders, the highest prices offered will be accepted in full down to the amount required, and if the same price appears in two or more tenders, and it is neces sary to accept only a part of the amount offered at such price, the amount accepted at such price will be prorated in accordance with the respective amounts applied for. The Secretary of the Treasury expressly reserves the right to accept or reject any or all tenders, in whole or in part, and his action in any such respect shall be final. Subject to these reservations, noncom petitive tenders for $200,000 or less without stated price from any one bidder will be accepted in full at the average price1 (in two decimals) of accepted com petitive tenders. 4. A ll bidders are required to agree not to pur chase or to sell, or to make any agreements with re spect to the purchase or sale or other disposition of any notes of this issue at a specific rate or price, until after 1 :30 p.m., Eastern Daylight Saving time, Tues day, June 22, 1971. 5. Commercial banks in submitting tenders will be required to certify that they have no beneficial interest in any of the tenders they enter for the account of their customers, and that their customers have no bene ficial interest in the banks’ tenders for their own ac count. IV. PAYMENT 1. Settlement for accepted tenders in accordance with the bids must be made or completed on or before June 29, 1971, at the Federal Reserve Bank or Branch or at the Office of the Treasurer of the United States, Washington, D. C. 20220, in cash or other funds im mediately available by that date. Payment will not be deemed to have been completed wrhere registered notes are requested if the appropriate identifying number as required on tax returns and other documents sub mitted to the Internal Revenue Service (an individ i Average price may be at, or more or less than 100.00. ual’s social security number or an employer identifica tion number) is not furnished. In every case wdiere full payment is not completed, the payment with the tender up to 5 percent of the amount of notes allotted shall, upon declaration made by the Secretary of the Treasury in his discretion, be forfeited to the United States. Any qualified depositary will be permitted to make settlement by credit in its Treasury Tax and Loan Account for notes allotted to it for itself and its customers. V. GENERAL PROVISIONS 1. As fiscal agents of the United States, Federal Reserve Banks are authorized and requested to receive tenders, to make such allotments as may be prescribed by the Secretary of the Treasury, to issue such notices as may be necessary, to receive payment for and make delivery of notes on full-paid tenders allotted, and they may issue interim receipts pending delivery of the definitive notes. 2. The Secretary of the Treasury may at any time, or from time to time, prescribe supplemental or amendatory rules and regulations governing the offer ing, which will be communicated promptly to the Fed eral Reserve Banks. JOHN B. CONNALLY, Secretary of the Treasury.
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