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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States r Circular No. 7 4 5 7~1 L September 17, 1974 J OFFERING OF TWO SERIES OF TREASURY BILLS $2,500,000,000 of 91-Day Bills, Additional Amount, Series Dated June 27,1974, Due December 26, 1974 (To Be Issued September 26, 1974) $1,800,000,000 of 182-Day Bills, Dated September 26, 1974, Due March 27, 1975 T o A ll In corporated Banks and Trust Companies, and O thers Concerned, in the Second Federal R eserv e D istrict: F ollow in g is the text of a notice issued by the T reasury Department, released at 4 p.m. tod a y : T he Treasury Department, by this public notice, invites tenders for tw o series of Treasury bills to the aggregate amount of $4,300,000,000, or thereabouts, to be issued September 26, 1974 as f o llo w s : 91-day bills (to maturity date) in the amount of $2,500,000,000, or thereabouts, representing an additional amount o f bills dated June 27, 1974, and to mature Decem ber 26, 1974 (C U S I P N o. 912793 V E 3 ) , origi nally issued in the amount of $1,900,585,000, the addi tional and original bills to be freely interchangeable. 182-day bills, for $1,800,000,000, or thereabouts, to be dated September 26, 1974, and to mature M arch 27, 1975 (C U S I P N o. 912793 W B 8 ). The bills will be issued for cash and in exchange for Treasury bills maturing September 26, 1974, outstanding in the amount of $4,501,665,000, of which Government accounts and Federal Reserve Banks, for themselves and as agents of foreign and international monetary authorities, presently hold $2,554,865,000. These accounts may exchange bills they hold for the bills now being offered at the average prices o f accepted tenders. Th e bills o f 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. T h ey w ill be issued in bearer form in denominations of $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (maturity value) and in book-entry form to designated bidders. Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Daylight Saving time, M onday, September 23, 1974. Tenders will not be re ceived at the Treasury Department, W ashington. Each tender must be for a minimum of $10,000. Tenders over $10,000 must be in mul tiples o f $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 form s and forw arded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions and dealers w ho make primary markets in Government securities and report daily to the Federal Reserve Bank o f N ew Y o rk their positions with respect to Government securities and borrow ings thereon may submit tenders for account of customers, provided the names of the customers are set forth in such tenders. Others will not be permitted 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 investment 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 com pany. Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, follow ing which public announcement will be made by the Treasury Department o f 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 decim als) 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 September 26, 1974, in cash or other immediately available funds or in a like face amount of Treasury bills maturing September 26, 1974. Cash and exchange tenders will receive equal treatm ent Cash adjustments will be made for differ ences between the par value of maturing bills accepted in exchange and the issue price of the new bills. Under Sections 4 5 4 (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, redeemed or otherwise disposed of, and the bills are excluded from consideration as capital assets. A ccordingly, 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 difference 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 N o. 418 (current revision) and this notice prescribe the terms of the Treasury bills and govern the conditions of their issue. Copies of the circular may be obtained from any Federal Reserve Bank or Branch. T h is Bank will receive tenders for both series up to 1 :30 p.m ., Eastern Daylight Saving time, M onday, September 23, 1974, at the Securities Department of its H ead Office a n d at its Buffalo Branch. T ender form s for the respective series are enclosed. Please use the appropriate form s to submit tenders and return them in the enclosed envelope marked “ T en d er for T reasury Bills.” T enders not requiring a deposit may be submitted by telegraph, subject to written con firm ation ; 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 ( 9 1 -day bills to be issued September 19, 1974, representing an additional amount of bills dated June 20, 1974, maturing December 19, 1 9 7 4 ; and 182-day bills dated September 19, 1974, maturing March 20, 1975) are shown on the reverse side of this circular. A lfred H ayes, President. (o ver ) RESULTS OF LAST W EEK LY OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED SEPTEMBER 19, 1974) Range of Accepted Competitive Bids 9 i-D a y Treasury Bills Maturing Decem ber 19 , 1974 ............................... .................... L o w ................................. ................... A verage ......................... ................... H igh 18 2 -Day Treasury Bills Maturing March 20 , 1975 P rice A p p rox. equiv. annual rate 97.942 8.142% 95.865a 8.179% 97.923 8 .2 1 7 % 8 .1 8 5 % ! 95.815 8.2 7 8 % 95.853 8.203% * 97.931 P rice A p p rox. equiv. annual rate a E xcepting one tender o f $2,425,000. 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 8.47% for the 91-day bills, and 8 .68% for the 182-day bills. (21 percent of the amount of 91-day bills bid fo r at the low price was accepted.) (4 4 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 District) 9 1 -Day Treasury Bills Maturing Decem ber 19 , 1974 D istrict A ccepted A pplied for B oston ............................ .............. N ew Y o rk .................................... Philadelphia ................. .............. $ 63,090,000 18 2 -Day Treasury Bills Maturing March 20 , 19 75 $ 42,865,000 Applied for $ 35,240,000 3,678,485,000 2,020,655,000 2,404,315,000 A ccepted $ 22,205,000 1,486,250,000 47,975,000 40,830,000 34,450,000 17,995,000 Cleveland ...................................... 83,215,000 58,195,000 52,465,000 41,225,000 R ich m on d .................................... A tlanta ............................. .............. C hicago .......................... .............. St. L ou is ........................ .............. 41,675,000 38,130,000 41,070,000 23,220,000 58,570,000 37,630,000 35,640,000 24,635,000 234,140,000 47,140,000 167,335,000 75,540,000 50,285,000 29,670,000 42,060,000 24,850,000 M inneapolis .................................. 38,925,000 6,225,000 26,550,000 Kansas City ................... .............. Dallas ............................... .............. 62,140,000 35,060,000 41,105,000 34,885,000 6,310,000 26,780,000 24,060,000 26,745,000 14,745,000 San F rancisco ............... ............. 211,515,000 114,460,000 169,315,000 36,330,000 ....................... ............. $4,605,075,000 T otal $2,500,965,000b b Includes $574,855,000 noncompetitive tenders accepted at the average price. c Includes $318,600,000 noncompetitive tenders accepted at the average price. $3,070,070,000 $1,800,085,000°