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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States r Circular No. 7 4 7 7 *1 L. October IS. 1974 J OFFERING OF TWO SERIES OF TREASURY BILLS $2,700,000,000 of 91-Day Bills, Additional Amount, Series Dated July 25, 1974, Due January 23, 1975 (To Be Issued October 24, 1974) $2,000,000,000 of 182-Day Bills, Dated October 24, 1974, Due April 24, 1975 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: F ollow in g is the text of a notice issued by the Treasury Department, released at 4 p.m. tod a y : The Treasury Department, by this public notice, invites tenders for tw o series of Treasury bills to the aggregate amount of $4,700,000,000, or thereabouts, to be issued O ctober 24, 1974, as fo llo w s : 91-day bills (to maturity date) in the amount of $2,700,000,000, or thereabouts, representing an additional amount o f bills dated July 25, 1974, and to mature Janu ary 23, 1975 (C U S I P N o. 912793 V S 2 ), originally is sued in the amount of $1,901,350,000, the additional and original bills to be freely interchangeable. 182-day bills, for $2,000,000,000, or thereabouts, to be dated O ctober 24, 1974, and to mature April 24, 1975 (C U S I P N o. 912793 W F 9 ). The bills w ill be issued for cash and in exchange for Treasury bills maturing O ctober 24, 1974, outstanding in the amount of $4,503,495,000, o f which Government accounts and Federal Reserve Banks, for themselves and as agents of foreign and international monetary authorities, presently hold $2,487,155,000. These accounts may exchange bills they hold for the bills now being offered at the average prices o f accepted tenders. 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 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, Monday, O ctober 21, 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 o f 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 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 co m 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. O nly those submitting competitive tenders w ill 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 w ill be accepted in full at the average price (in three decim als) of accepted com peti tive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or com pleted at the Federal Reserve Bank on O ctober 24, 1974, in cash or other im mediately available funds or in a like face amount of Treasury bills maturing October 24, 1974. Cash and exchange tenders will receive equal treatment. Cash adjustments w ill be made for d iffe r 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 ccordin gly, the owner of Treasury bills (other than life insurance com panies) 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 o f 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 his Bank will receive tenders for both series up to 1 :30 p.m., Eastern D aylight Saving time, M on day, O ctober 21, 1974, at the Securities Department o f its H ead Office and at its B uffalo 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 ender for T reasury B ills." Tenders not requiring a deposit may be submitted by telegraph, subject to written confirm 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 (91-day bills to be issued October 17, 1974, representing an additional amount of bills dated July 18, 1974, maturing January 16, 1975; and 182-clay bills dated October 17, 1974, maturing April 17, 1975) are shown on the reverse side of this circular. A lfred H ayes, President. (o v e r ) RESULTS OF LAST W EEKLY OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED OCTOBER 17, 1974) Range of Accepted Competitive Bids 9 1 -Day Treasury Bills Maturing January 16 , 19 75 Price 18 2 -Day Treasury Bills Maturing April 17 , 1975 Approx. equiv. annual rate Price Approx. equiv. annual rate H igh .................................................... 9 8 .0 6 l a 7.671% 96.109b 7.6 9 6% L o w ...................................................... 98.032 7 .7 8 5 % 96.014 7 .884% A verage 98.048 7 .7 2 2 % ! 96.042 7 .8 2 9 % ! ............................................. a Excepting three tenders totaling $9,465,000. b Excepting two tenders totaling $305,000. 1 These rates are on bank discount basis. The equivalent coupon issue yields are 7.99% for the 91-day bills, and 8.26% for the 182-day bills. (77 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (5 0 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) 91 -Day Treasury Bills Maturing January 16 , 1975 Applied for District Boston ............................ .............. N ew Y o rk ..................... .............. Philadelphia ................. .............. Cleveland ....................... .............. $ 47,300,000 18 2 -Day Treasury Bills Maturing April 17 , 1975 Accepted $ 19,985,000 Accepted Applied for $ 24,820,000 2,472,565,000 $ 13,820,000 3,398,795,000 2,262,520,000 49,285,000 24,285,000 8,325,000 1,710,565,000 8,325,000 56,145,000 33,205,000 39,095,000 39,095,000 .................................... 43,785,000 21,785,000 16,970,000 16,970,000 Atlanta ........................................... 36,610,000 32,515,000 21,455,000 21,455,000 .......................... .............. 256,305,000 175,130,000 120,335,000 40,835,000 27,135,000 R ichm ond C hicago ........................ .............. 33,490,000 26,110,000 42,135,000 M inneapolis .................................. 5,660,000 4,580,000 3,580,000 Kansas City ................... ............. 42,430,000 3,660,000 30,195,000 40,935,000 26,920,000 St. L ouis Dallas ............................................. 25,025,000 14,775,000 27,785,000 14,785,000 San F rancisco ............... ............. 171,000,000 56,425,000 135,520,000 76,520,000 T ota l ..................... ............. $4,165,830,000 $2,700,590,000= c Includes $312,170,000 noncompetitive tenders accepted at the average price. d Includes $220,925,000 noncompetitive tenders accepted at the average price. $2,954,520,000 $2,000,005,000d