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F E D E R A L R E S E R V E B AN K O F NEW YORK F is c a l A gen t o f the U nited S tates C i r c u l a r N o . 6887 J a n u a r y 26 , 19 7 2 t To All Banking Institutions, and Others Concerned, in the Se cond Federal R e s e r v e District: The following statement was made public today by the Treasury Department: TREASURY ANNOUNCES REFUNDING The Treasury today announced that it is offering holders bonds maturing February 15, 1972, an opportunity to exchange 3 -month 5 -3 /4 % note or a 10-year 6 -3 /8 % bond. The bonds are subscription to individuals in amounts not to exceed $10,000 for scriptions for the notes will not be accepted. of $4.5 billion of notes and their holdings for a 4 -year also being offered for cash any one person. Cash sub The public holds $3.7 billion of the securities eligible for exchange, and about $0.8 bil lion is held by Federal Reserve Banks and Government accounts. In addition, the 6 -3 /8 % bonds are being made available to holders of $14.3 billion of securities maturing in February and May of 1974. Of these, $11.8 billion are held by the public. Details showing cash and interest adjustments applying in exchanges of securities due in 1974 appear in the table at the end of this release. The 5 -3 /4 % notes are not being offered to these holders. The securities eligible for exchange for either the notes or bonds are as follows: 4 -3 /4 % Treasury Notes of Series A -1972, maturing February 15, 1972 7 -1 /2 % Treasury Notes of Series C -1972, maturing February 15, 1972 4% Treasury Bonds of 1972, maturing February 15, 1972 The securities eligible for exchange for the bonds only are as follows: 7 -3 /4 % 4 -1 /8 % 7 -1 /4 % 4 -1 /4 % Treasury Treasury Treasury Treasury Notes of Series C -1974, maturing February 15, 1974 Bonds of 1974, maturing February 15, 1974 Notes of Series D -1974, maturing May 15, 1974 Bonds of 1974, maturing May 15, 1974 The securities being offered in exchange are: 5 -3 /4 % Treasury Notes of Series E-1976,' dated February 15, 1972, due May 15, 1976 (Cusip No. 912827 CP5), at par 6 -3 /8 % Treasury Bonds of 1982, dated February 15, 1972, due February 15, 1982 (Cusip No. 912810 BL1), at par. Subscription books for the offering will be open until 5:00 p .m ., local time, Wednesday, February 2, 1972. To be timely subscriptions MUST BE RECEIVED by a Federal Reserve Bank or Branch or by the Office of the Treasurer of the United States by such time, except that subscriptions addressed to a Federal Reserve Bank or Branch or to the Office of the Treasurer of the United States postmarked before midnight, Tuesday, February 1, 1972, will be deemed to be timely. (Over) The notes and bonds will be made available in registered as well as bearer form in denominations of $1,000, $5,000, $10,000, $100,000, and $1,000,000. All subscribers re questing registered securities will be required to furnish appropriate identifying numbers as required on tax returns and other documents submitted to the Internal Revenue Service. Any coupons dated February 15, 1972, on notes and bonds tendered in exchange should be detached and cashed when due. The February 15, 1972 interest due on registered notes and bonds will be paid by issue of interest checks in regular course to holders of record on January 14, 1972, the date the transfer books closed. All coupons dated subsequent to Feb ruary 15, 1972, must be attached to surrendered notes and bonds due on February 15 and May 15, 1974. Interest will be adjusted as of February 15, 1972, for the securities due May 15, 1974. Subscriptions for cash must be accompanied by payment of 10% of the amount of bonds applied for. Cash subscriptions will be allotted in full and payment therefor must be com pleted by Tuesday, February 15, 1972, in cash or other funds immediately available to the Treasury by that date. The Treasury will construe as timely payment any check payable to the Federal Reserve Bank or the Treasurer of the United States that is received at such bank or office by Wednesday, February 9, 1972, provided the check is drawn on a bank in the Fed eral Reserve District of the bank or office to which the subscription was submitted. Banking institutions in submitting cash subscriptions for customers will be required to certify that they have no beneficial interest in any of the subscriptions they enter. Subscribers exchanging securities due in 1974 may elect, for Federal income tax pur poses, to recognize gain or loss on account of the exchange either in the taxable year of the exchange or (except to the extent that cash is received) in the taxable year of disposition or redemption of the securities received in the exchange. Any gain to the extent that cash is received by the subscriber (other than as an interest adjustment) must be recognized in the year of the exchange. Subscribers exchanging securities due in 1972 must recognize gain or loss on account of the exchange in the taxable year of the exchange. The payment and delivery date for the securities will be February 15. Interest on the notes will be payable on a semiannual basis on May 15 and November 15 in each year until the notes mature. Interest on the bonds will be payable semiannually on August 15, 1972, and February 15 and August 15 in each year thereafter until maturity. TABLE OF PAYMENTS TO OR BY SUBSCRIBERS IN EXCHANGES FOR THE 6 -3 /8 % BONDS (In dollars per $1,000 face value) Payment to Securities to be exchanged Payment to or by ( — ) subscriber to adjust exchange values 7 - 3 / 4 % N ote o f 2 / 1 5 / 7 4 .................. 5 3 .2 1 5 8 3 4 - 1 /8 % Bond o f 2 / 1 5 / 7 4 .................. -1 4 .4 0 1 6 7 7 - 1 / 4 % N ote o f 5 / 1 5 / 7 4 .................. 4 7 .5 6 2 2 8 4 - 1 / 4 % Bond o f 5 / 1 5 / 7 4 .................. -1 5 .0 4 9 4 6 subscriber for accrued in terest to February 15, 1972, on secu rities exchanged - Net amount to be paid to subscriber by subscriber 5 3 .2 1 5 8 3 - - 1 8 .3 2 4 1 8 6 5 .8 8 6 4 6 1 0 .7 4 1 7 6 1 4 .4 0 1 6 7 - 4 .3 0 7 7 0 If there is any doubt that subscriptions sent by mail will reach this Bank or its Branch as required above, subscribers should use other means of transmitting their subscriptions. The official offering circular and subscription forms will be mailed to reach you by Monday, January 31. Alfred Hayes, President.
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