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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States f Circular No. 7652 1 L June 12, 1975 J AUCTION OF $2.0 BILLION OF TREASURY NOTES Series J-1977 To All Banking Institutions, and Others Concerned, in the Second Federal Reserve District: The following statement was issued June 11 by the Treasury Department: The Treasury will auction to the public under competitive and noncompetitive bidding up to $2.0 billion o f 2-year notes. The coupon rate for the notes will be determined after tenders are allotted. Additional am ounts o f the notes may be issued at the average price o f accepted tenders to G overnm ent accounts and to Federal Reserve Banks for themselves and as agents o f foreign and international m onetary authorities. The notes will be Treasury Notes o f Series J-1977, dated June 30, 1975, due June 30, 1977 (C U S IP No. 912827 E Q 1 ) with interest payable semiannually on December 31, 1975, June 30, 1976, D ecem ber 31, 1976, and June 30, 1977. They will be issued in registered and bearer form in denom inations o f $5,000, $10,000, $ 100,000 and $ 1,000 ,000 , and they will be available for issue in book-entry form. Paym ent for the notes must be made on June 30, 1975. Payment may not be m ade through tax and loan accounts. Notes in bearer form will be delivered on June 30, 1975. Tenders will be received up to 1:30 p.m., Eastern Daylight Saving time, Tuesday, June 17, at any Federal Reserve Bank or Branch and at the Bureau of the Public Debt, Washington, D. C. 20226; provided, however, that noncompetitive tenders will be considered timely received if they are mailed to any such agency under a postm ark no later than Monday, June 16. Each tender must be in the amount o f $5,000 or a multiple thereof, and all tenders must state the yield desired, if a competitive tender, or the term “ noncom petitive”, if a noncompetitive tender. Fractions may not be used in tenders. The notation “ TE N D E R FO R TR EA SU R Y N O TE S” should be printed at the bottom o f envelopes in which tenders are submitted. Competitive tenders must be expressed in terms o f annual yield in two decimal places, e.g., 7.1 1, and not in terms o f a price. Tenders at the lowest yields, and noncompetitive tenders, will be accepted to the extent required to attain the am ount offered. After a determination is made as to which tenders are accepted, a coupon yield will be determ ined to the nearest Vs o f 1 percent necessary to make the average accepted price 100.000 or less. T hat will be the rate o f interest that will be paid on all o f the notes. Based on such interest raie, the price on each competitive tender allotted will be determined and each successful competitive bidder will pay the price corresponding to the yield he bid. Price calculations will be carried to three decimal places on the basis o f price per hundred, e.g., 99.923, and the determinations o f the Secretary o f the Treasury shall be final. Tenders at a yield that will produce a price less than 99.501 will not be accepted. The Secretary o f 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 $500,000 or less will be accepted in full at the average price o f accepted competitive tenders, which price will be 100.000 or less. Commercial banks, which for this purpose are defined as banks accepting dem and deposits, and dealers who make prim ary markets in Government securities and report daily to the Federal Reserve Bank o f New York their positions with respect to Government securities and borrowings thereon, may subm it tenders for the account o f customers, provided the names o f the customers are set forth in such tenders. Others will not be perm itted to submit tenders except for their own account. Tenders will be received without deposit from commercial and other banks for their own account, Federally-insured savings and loan associations, States, political subdivisions or instrumentalities thereof, public pension and retirement and other public funds, international organizations in which the United States holds membership, foreign central banks and foreign States, dealers who make prim ary markets in Governm ent securities and report daily to the Federal Reserve Bank o f New York their positions with respect to Governm ent securities and borrowings thereon, Federal Reserve Banks, and Governm ent accounts. Tenders from others must be accompanied by paym ent o f 5 percent o f the face am ount o f notes applied for. However, bidders who submit checks in paym ent on tenders submitted directly to a Federal Reserve Bank or the Treasury may find it necessary to submit full paym ent for the notes with their tenders in order to meet the time limits pertaining to checks as hereinafter set forth. Allotment notices will not be sent to bidders who submit noncompetitive tenders. Paym ent for accepted tenders must be completed on or before M onday, June 30, 1975, at the Federal Reserve Bank or Branch or at the Bureau o f the Public D ebt in cash, in other funds immediately available to the Treasury by June 30, or by check drawn to the order o f the Federal Reserve Bank to which the tender is submitted, or the United States Treasury if the tender is submitted to it, which must be received at such Bank or at the Treasury no later than: (1 ) W ednesday, June 25, 1975, if the check is drawn on a bank in the Federal Reserve District o f the Bank to which the check is submitted, or the Fifth Federal Reserve District in the case o f the Treasury, or (2 ) M onday, June 23, 1975, if the check is drawn on a bank in another district. Checks received after the dates set forth in the preceding sentence will not be accepted unless they are payable at a Federal Reserve Bank. W here full paym ent is not completed on time, the allotment will be cancelled and the deposit with the tender up to 5 percent o f the am ount o f notes allotted will be subject to forfeiture to the United States. The terms of the offering are set forth in Treasury Department Circular No. 18-75, Public Debt Series, dated June 12, 1975, 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 17, 1975, at the Securities Department of its Head Office and at its Buffalo Branch; provided, however, that noncompetitive tenders will be considered timely received if they are mailed to this Bank or its Branch under a postmark no later than June 16, 1975. Please use the enclosed tender form to submit a tender, and return it in the enclosed envelope marked “Tender for Treasury Notes or Bonds.” 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, under the conditions and procedures set forth in Section IV of Treasury Department Circular No. 18-75; settlement cannot be made by credit in Treasury Tax and Loan Accounts. If payment is made by check, the check must be a certified personal check or an official bank check, payable on its face to the Federal Reserve Bank of New York; checks endorsed to this Bank will not be accepted. The notes will be auctioned on a yield basis, as set forth in Section III of the official offering circular. Tenders at a yield that will produce a price less than 99.501 will not be accepted. Noncompetitive bidders will be required to pay the average price of accepted competitive tenders. Telephone inquiries regarding this offering may be made by calling Telephone No. 212-791-5823, 212-791-6616, or 212-791-5465. A lfred H a y es, President. 2 UNITED STATES OF AMERICA TREASU RY NOTES OF SERIES J-1977 Dated and bearing interest from June 30, 1975 Due June 30, 1977 DEPARTMENT OF THE TREASURY, Office of the Secretary, DEPARTMENT CIRCULAR Public Debt S eries—No. 18-75 Washington, June 12, 1975. I. INVITATION FOR TENDERS 5. The notes will be subject to the general regulations o f the D epartm ent o f the Treasury, now or hereafter prescribed, governing United States notes. 1. The Secretary of the Treasury, pursuant to the authority o f the Second Liberty Bond Act, as amended, invites tenders on a yield basis for $ 2 ,000 ,000 ,000 , or thereabouts, o f notes o f the United States, designated Treasury Notes o f Series J-1977. The interest rate for the notes will be determined as set forth in Section III, paragraph 3, hereof. Additional amounts o f these notes may be issued at the average price o f accepted tenders to Governm ent accounts and to Federal Reserve Banks for themselves and as agents o f foreign and inter national monetary authorities. Tenders will be received up to 1:30 p.m., Eastern Daylight Saving time, Tuesday, June 17, 1975, under competitive and noncompetitive bidding, as set forth in Section III hereof. III. TENDERS AND ALLOTMENTS 1. Tenders will be received at Federal Reserve Banks and Branches and at the Bureau o f the Public Debt, W ashington, D. C. 20226, up to the closing hour, 1:30 p.m., Eastern Daylight Saving time, Tuesday, June 17, 1975. Each tender must state the face am ount o f notes bid for, which must be $5,000 or a multiple thereof, and the yield desired, except that in the case o f noncompeti tive tenders the term “ noncom petitive” should be used in lieu o f a yield. In the case o f competitive tenders, the yield must be expressed in terms o f an annual yield, with two decimals, e.g., 7.11. Fractions may not be used. Noncompetitive tenders from any one bidder may not exceed $500,000. II. DESCRIPTION OF NOTES 1. The notes will be dated June 30, 1975, and will bear interest from that date, payable semiannually on December 31, 1975, June 30, 1976, Decem ber 31, 1976, and June 30, 1977. They will mature June 30, 1977, and will not be subject to call for redemption prior to maturity. 2. Commercial banks, which for this purpose are defined as banks accepting dem and deposits, and deal ers who make prim ary markets in Governm ent secu rities and report daily to the Federal Reserve Bank o f New York their positions with respect to Governm ent securities and borrowings thereon, may submit tenders for account o f customers provided the names o f the customers are set forth in such tenders. Others will not be perm itted to subm it tenders except for their own account. Tenders will be received without deposit from banking institutions for their own account, Federallyinsured savings and loan associations, States, political subdivisions or instrumentalities thereof, public pension and retirem ent and other public funds, international organizations in which the United States holds m em bership, foreign central banks and foreign States, dealers who make prim ary markets in Governm ent securities and report daily to the Federal Reserve Bank o f New York their positions with respect to Governm ent securities and borrowings thereon, and Governm ent accounts. Tenders from others must be accompanied by paym ent o f 5 percent o f the face amount o f notes applied for. 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 o f 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 payment o f taxes. 4. Bearer notes with interest coupons attached, and notes registered as to principal and interest, will be issued in denominations o f $5,000, $10,000, $100,000 and $1,000,000. Book-entry notes will be available to eligible bidders in multiples o f those amounts. Inter changes o f notes o f different denominations and of coupon and registered notes, and the transfer o f regis tered notes will be permitted. 3 3. Im m ediately after the closing hour tenders will be opened, following which public announcem ent will be m ade by the D epartm ent o f the Treasury o f the am ount and yield range o f accepted bids. Those submitting competitive tenders will be advised o f the acceptance or rejection thereof. In considering the acceptance o f tenders, those with the lowest yields will be accepted to the extent required to attain the am ount offered. Ten ders at the highest accepted yield will be prorated if necessary. After the determ ination is made as to which tenders are accepted, an interest rate will be established at the nearest Vs o f one percent necessary to make the average accepted price 100.000 or less. That will be the rate o f interest that will be paid on all o f the notes. Based on such interest rate, the price on each com petitive tender allotted will be determ ined and each successful competitive bidder will be required to pay the price correspondending to the yield bid. Price calcu lations will be carried to three decimal places on the basis o f price per hundred, e.g., 99.923, and the determ inations o f the Secretary o f the Treasury shall be final. The Secretary o f the Treasury expressly reserves the right to accept or reject any or all tenders, in whole or in part, including the right to accept tenders for more or less than the $ 2 ,000 ,000,000 of notes offered to the public, and his action in any such respect shall be final. Subject to these reservations, noncompetitive tenders for $500,000 or less without stated yield from any one bidder will be accepted in full at the average price (in three decim als) o f accepted competitive tenders. IV. PAYMENT 1. Settlement for accepted tenders in accordance with the bids must be made or completed on or before June 30, 1975, at the Federal Reserve Bank or Branch or at the Bureau o f the Public Debt, W ashington, D. C. 20226. Paym ent must be in cash, in other funds immediately available to the Treasury by June 30, 1975, or by check drawn to the order of the Federal Reserve Bank to which the tender is submitted, or the United 4 States Treasury if the tender is submitted to it, which must be received at such Bank or at the Treasury no later than: (1 ) Wednesday, June 25, 1975, if the check is drawn on a bank in the Federal Reserve District of the Bank to which the check is submitted, or the Fifth Federal Reserve District in the case of the Treasury, or (2 ) Monday, June 23, 1975, if the check is drawn on a bank in another district. Checks received after the dates set forth in the preceding sentence will not be accepted unless they are payable at a Federal Reserve Bank. Payment will not be deemed to have been completed where registered notes are requested if the appropriate identifying num ber as required on tax returns and other documents submitted to the Internal Revenue Service (a n individual’s social security num ber or an employer identification num ber) is not furnished. In every case where full paym ent is not completed, the payment with the tender up to 5 percent o f the am ount of notes allotted shall, upon declaration made by the Secretary o f the Treasury in his discretion, be forfeited to the United States. V. GENERAL PROVISIONS 1. As fiscal agents o f the United States, Federal Reserve Banks are authorized and requested to receive tenders, to make such allotments as may be prescribed by the Secretary o f the Treasury, to issue such notices as may be necessary, to receive paym ent for and make delivery o f notes on full-paid tenders allotted, and they may issue interim receipts pending delivery o f the definitive notes. 2. The Secretary o f the Treasury may at any time, or from time to time, prescribe supplemental or am enda tory rules and regulations governing the offering, which will be communicated promptly to the Federal Reserve Banks. STEPHEN S. GARDNER, Acting Secretary o f the Treasury.
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