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F E D E R A L R E S E R V E BANK O F N E W YORK Fiscal Agent of the United States rCircular No. 6 9 8 9 1 August 15, 1972 J t OFFERING OF TWO SERIES OF TREASURY BILLS $2,300,000,000 of 92-Day Bills, Additional Amount, Series Dated May 25,1972, Due November 24,1972 (To Be Issued August 24, 1972) $1,800,000,000 of 182-Day Bills, Dated August 24, 1972, Due February 22, 1973 T o A ll In corporated B anks and T ru st Com panies, and O thers Concerned, in the Second Federal R eserve D istric t: Following is the text of a notice issued by the Treasury Department, released at 4 p.m. today: The Treasury Department, by this public notice, invites tenders for two series of Treasury bills to the aggregate amount of $4,100,000,000, or thereabouts, for cash and in exchange for Treas ury bills maturing August 24, 1972, in the amount of $4,102,370,000, as follows: 92-day bills (to maturity date) to be issued August 24, 1972, in the amount of $2,300,000,000, or thereabouts, representing an additional amount o f bills dated May 25, 1972, and to mature November 24, 1972 (C U S IP No. 912793 P N 0 ), originally issued in the amount of $1,800,905,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,800,000,000, or thereabouts, to be dated August 24, 1972, and to mature February 22, 1973 (C U S IP No. 912793 QG4). The bills of both series will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at maturity their face amount will be payable without interest. They will be issued in bearer form only, and in denominations of $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (maturity value). 1 enders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Daylight Saving time, Monday, August 21, 1972. Tenders will not be received at the Treasury Department, Washington. Each tender must be for a minimum of $10,000. Tenders over $10,000 must be in multiples of $5,000. In the case of competitive tenders the price offered must be expressed on the basis of 100, with not more than three decimals, e.g., 99.925. Fractions may not be used. It is urged that tenders be made on the printed forms and forwarded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions generally may submit tenders for account of customers, provided the names o f the customers are set forth in such tenders. Others than banking institutions will not be per mitted to submit tenders except for their own account. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in invest ment securities. Tenders from others must be accompanied by payment of 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price range of accepted bids. Only those submitting competitive tenders will be advised of the acceptance or rejection thereof. 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, noncompetitive tenders for each issue for $200,000 or less without stated price from any one bidder will be accepted in full at the average price (in three decimals) of accepted competi tive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on August 24, 1972, in cash or other im mediately available funds or in a like face amount of Treasury bills maturing August 24, 1972. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for dif ferences between the par value o f maturing bills accepted in ex change and the issue price of the new bills. Under Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954, the amount of discount at which bills issued here under are sold is considered to accrue when the bills are sold, re deemed or otherwise disposed of, and the bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) issued hereunder must include in his income tax return, as ordinary gain or loss, the dif ference between the price paid for the bills, whether on original issue or on subsequent purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made. Treasury Department Circular No. 418 (current revision) and this notice nrescribe the terms of the Treasury bills and govern the conditions of their issue. Copies o f the circular may be ob tained from any Federal Reserve Bank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Monday, August 21, 1972, at the Securities Department of its Head Office and at its Buffalo Branch. Tender forms for the respective series are enclosed. Please use the appropriate forms to submit tenders and return them in the enclosed envelope marked “ Tender for Treasury Bills (W eekly).” Tenders not requiring a deposit may be submitted by telegraph, subject to written confirmation; no tenders may be submitted by telephone. Payment for the Treasury bills cannot be made by credit through the Treasury Tax and, Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. Results of the last weekly offering of Treasury bills (91-day bills to be issued August 17, 1972, representing an additional amount of bills dated May 18, 1972, maturing November 16, 1972; and 182-day bills dated August 17, 1972, maturing February 15, 1973) are shown on the reverse side of this circular. A lfred H a yes, President. Please note th a t the T reasury bills m aturing Novem ber 24, 1972 will be 92-day bills. ( over) RESULTS OF LAST W EEK LY O FFER IN G OF TREASURY BILLS (TW O SERIES TO BE ISSUED AUGUST 17, 1972) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing November 1 6 ,1 97 2 P rice 182-Day Treasury Bills Maturing February 1 5 ,1 97 3 A p p ro x . equiv. annual rate P rice A p p ro x . equiv. annual rate High .......................... ................ 99.010 3.916% 97.754a 4.443% L o w ............................ ................ 98.994 3.980% 97.725 4.500% Average 99.000 3.956%x 97.743 4.464%! .................... ................ a Excepting two tenders totaling $825,000. 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 4.05% for the 91-day bills, and 4.63% for the 182-day bills. (84 percent of the amount of 91-day bills bid for at the low price was accepted.) (24 percent of the amount of 182-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing November 1 6 ,1 97 2 A p p lied fo r D istric t Boston ........................ .......... $ 26,645,000 182-Day Treasury Bills Maturing February 1 5 ,1 9 7 3 A ccepted $ 14,645,000 A p p lied fo r $ 16,965,000 A ccepted $ 5,965,000 New York .................. .......... 3,269,475,000 1,981,510,000 2,637,850,000 1,489,050,000 Philadelphia................ .......... 13,020,000 13,020,000 25,430,000 5,430,000 Cleveland .................... .......... 15,940,000 15,880,000 6,350,000 6,350,000 R ich m on d.................... .......... 13,720,000 7,720,000 15,320,000 4,320,000 Atlanta ........................ .......... 36,240,000 16,740,000 28,425,000 12,405,000 C h icago........................ .......... 276,550,000 139,050,000 264,825,000 141,825,000 St. Louis .................... .......... 33,235,000 15,735,000 28,005,000 15,505,000 Minneapolis ................ .......... 50,220,000 40,260,000 33,890,000 29,890,000 Kansas C i t y ................ .......... 39,640,000 18,410,000 25,655,000 9,655,000 Dallas .......................... .......... 52,890,000 12,570,000 31,645,000 14,645,000 San Francisco ............ .......... 62,865,000 24,710,000 87,130,000 65,130,000 .......... $3,890,440,000 T otal ................... $2,300,250,000b b Includes $171,245,000 noncompetitive tenders accepted at the average price of 99.000. c Includes $71,510,000 noncompetitive tenders accepted at the average price of 97.743. $3,201,490,000 $1,800,170,000c TREASURY DEPARTMENT W a s h in g to n , D. C. August 18, 1972 STATEMENT FOR THE PRESS, FOR IMMEDIATE RELEASE T r e a s u r y A n n ou n ces P la n s F or R e s t r u c t u r i n g Of M on th ly B i l l s , P r o v id in g $ 1 .8 B i l l i o n In New Cash By The End Of O c t o b e r The T r e a s u r y a n n ou n ced t o d a y t h a t i t i s t a k i n g th e f i r s t s t e p s to w a rd e s t a b l i s h i n g r e g u l a r a u c t i o n s o f 52-w eek T r e a s u r y b i l l s . T h ese w i l l u l t i m a t e l y r e p l a c e t h e m o n th ly o f f e r i n g s o f 9 -m on th and o n e - y e a r b i l l s . A t m a t u r it y o f t h e $ 1 .7 b i l l i o n o f m o n th ly b i l l s due A u gu st 3 1 , 1 9 7 2 , t h e T r e a s u r y w i l l i s s u e ( l ) $ 1 .8 b i l l i o n o f b i l l s t o m atu re on T u e s d a y , A u g u st 2 8 , 1 9 7 3 , and ( 2 ) $500 m i l l i o n o f b i l l s t o m ature on May 3 1 , 1 9 7 3 . A u c t io n s f o r b o t h t h e s e b i l l s w i l l b e h e l d on T h u r s d a y , A u gu st 2 b . The T r e a s u r y a l s o a n n ou n ced t h a t i t in te n d s : (1 ) i n com in g m onths t o r e p e a t th e o f f e r i n g s o f $ 1 .8 b i l l i o n o f s l i g h t l y l e s s th a n o n e - y e a r b i l l s t o m ature on T u esd a ys a t fo u r -w e e k i n t e r v a l s fro m A u g u st 2 8 , 1 9 7 3 , and (2 ) i n l a t e S ep tem ber and a g a in i n l a t e O c t o b e r 1972 t o s e l l $ 0 .5 b i l l i o n o f 9-m on th b i l l s m a tu rin g i n June and J u ly 1 9 7 3 , r e s p e c t iv e ly . T h ese w i l l b e t h e f i n a l s a l e s o f 9-m on th b i l l s and w i l l r e s u l t i n e q u a l am ounts o f m a t u r i t i e s o f m o n th ly b i l l s th r o u g h J u ly 1 9 7 3 - T h ese p la n s an n ou n ced b y th e T r e a s u r y w i l l r e s u l t i n t h e r a i s i n g o f $ 1 .8 b i l l i o n o f new c a s h b y t h e end o f O c t o b e r , t h a t i s $ 0 .6 b i l l i o n a t t h e end o f A u gu st and $ 0 .6 b i l l i o n a t t h e end o f e a ch o f th e n e x t tw o m on th s. The T r e a s u r y a l s o i n d i c a t e d t h a t i t i s s t u d y in g th e p o s s i b l e d e s i r a b i l i t y o f h a v in g w e e k ly a u c t i o n s o f 52-w eek b i l l s and o f c o n v e r t i n g i t s o f f e r i n g s o f 6 -m on th b i l l s from a T h u rsd a y t o a T u esd a y m a t u r it y t o c o i n c i d e w it h t h e w e e k ly m a t u r i t i e s o f su ch 5 2 -w eek b i l l s .
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