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FEDERAL RESERVE BANK OF N E W YORK Fiscal Agent of the United States C ir c u la r N o . a 8011 D e c e m b e r 14. 1 9 7 6 TR EASU R Y TO AUCTION $3,000 MILLION OF 2-YEAR NOTES To All Banking Institutions, and Others Concerned, in the Second Federal Reserve District: The following statement was issued yesterday by the Treasury Department: The Departm ent of the Treasury will auction $3,000 million of 2-year notes to refund $2,017 million of notes held by the public m aturing December 31, 1976, and to raise $983 million new cash. Additional amounts of these notes may be issued at the average price of accepted tenders to Government accounts and to Federal Reserve Banks for their own account in exchange for $265 million m aturing notes held by them, and to Federa Reserve Banks as agents of foreign and international monetary authorities for new cash only. Printed on the reverse side is a table summarizing the highlights of the ottering. Copies of the official offering circular will be furnished upon request. Bidders submitting noncompetitive tenders for the notes should realize that it is possible that the average price may be above par, in which case they would have to pay more than the face value tor the securities. If payment for the notes is made by check, the check should 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. E nclosed is a copy of the form to be used in su b m ittin g tenders. It th ere is any d o u b t th a t te n d e is sent by m ail will reach this B ank or its B ranch by M onday, D ecem ber 20, b id d ers should use o th er m eans of tra n sm ittin g th eir ten d ers. A recorded message (Tel. No. 212-791-5823) provides information about this and other Treasury offerings; additional inquiries regarding this offering may be made by calling Telephone No. 212-791-6619 or 212-791-5465. P A U L A. V O L C K E R , President. (Over) H IG H LIG H TS OF T R E A SU R Y O F F E R IN G TO TH E PUBLIC OF 2-Y E A R N O TES TO BE IS SU E D D E C E M B E R 31, 1976 A m ount Offered: To the p u b lic.................................... $3,000 million D escription o f Security: T e r m a n d ty p e o f s e c u r i t y ................ 2-year notes Series and CUS1P designation . . . Series U-1978 (CUSIP No. 912827 GG1) M aturity d a t e .................................. December 31, 1978 Call date .......................................... No provision Interest coupon r a t e ....................... To be determined, based on the average of accepted bids Investment y ie ld .............................. To be determined at auction Premium or d is c o u n t..................... To be determined after auction Interest payment d a te s ................... June 30 and December 31 Minimum denomination available $5,000 Term s o f Sale: Method of sale ................................................... Yield auction Accrued interest payable by in v e sto r............. See settlement dates (No. 2 below) Preferred allotment .......................................... Noncompetitive bid for $1,000,000 or less Deposit requirem ent.......................................... 5% of face amount D e p o s it g u a r a n te e by d e s ig n a te d in s titu tio n s Acceptable Key Dates: Deadline for receipt of te n d e rs .................................................................................Monday, December 20, 1976 by 1:30 p.m „ EST Settlement dates (final payment due): 1. Offices that will be open December 31, 1976 — a) Cash or Federal fu n d s .......................................................................................... Friday, December 31, 1976 b) Check drawn on bank within FRB district where submitted ..................... Tuesday, December 28, 1976 c) Check drawn on bank outside FRB district where subm itted..................... Monday, December 27, 1976 2. Offices closed on December 31, 1976 — (The Bureau of the Public Debt and Federal Reserve offices in Minneapolis, Dallas, El Paso, Houston, San Antonio, and Little Rock) a) Cash, Federal funds, or a check in collected form, plus three days accrued interest ............................................................................. Monday, January 3, 1977 b) M aturing Treasury sec u ritie s............................................................................. Monday, January 3, 1977 c) Cash, Federal funds, or a check in collected fo rm ........................................ Thursday, December 30, 1976 Delivery date for coupon securities Friday, December 31, 1976 U N I T E D ST A TES OF A M E R IC A TREASURY NOTES OF DECEMBER 31, 1978 SERIES U-1978 DEPARTMENT OF THE TREASURY, Office of the Secretary, DEPARTMENT CIRCULAR Public Debt Series—No. 33-76 1. W a sh in g to n , D e c e m b e r 13, 1976. IN V IT A T IO N F O R T E N D E R S 3. 1.1 The Secretary of the Treasury, pursuant to the Act, a s amended, invites tenders for $3,000,000,000, or thereabouts, of a u t h o r i t y o f t h e S e c o n d L ib e r t y B o n d s e c u r itie s o f th e U n ite d S ta te s, d e s ig n a te d T reasu ry Notes of December 31, 1978, Series U-1978 (CUSIP No. 9 1 2 8 2 7 G G 1 ) . T h e s e c u r i t i e s w ill b e s o l d a t a u c t i o n w it h bidding on the basis of yield, and with the interest rate a n d th e p r ic e e q u iv a le n t o f e a c h a c c e p te d b id to b e d e termined as setforth below. Additional amounts of these s e c u r i t i e s m a y b e i s s u e d t o G o v e r n m e n t a c c o u n t s a n d to Federal Reserve Banks fortheir own account in exchange fo r m a tu r in g T r e a s u r y s e c u r itie s b e in g h e ld b y th e m , a n d to Federal Reserve Banks, as agents of foreign and inter n a tio n a l m o n e ta r y a u th o r itie s , fo r n e w c a s h o n ly . 2. D E SC R IP T IO N OF SE C U R ITIES 2.1 The securities will be dated December 31, 1976, and will bear interest from that date, payable on a semi annual basis on June 30 and December 31, 1977, and thereafter on June 30 and December 31 in each year until the principal amount becomes payable. They will mature December 31, 1978, and will not be subject to call for redemption prior to maturity. 2.2 The income derived from the securities is s u b j e c t t o a ll t a x e s i m p o s e d u n d e r t h e I n t e r n a l R e v e n u e Code of 1954. The securities are subject to estate, in h e r ita n c e , g ift o r o th e r e x c is e ta x e s , w h e th e r F e d e r a l or State, but are exempt from a ll taxation now or hereafter im p o s e d o n th e p r in c ip a l o r in te r e s t t h e r e o f b y a n y S ta te , or any of the possessions of the United States, or by any lo c a l t a x in g a u th o r ity . 2.3 The securities will be acceptable to secure deposits ofpublic moneys. They will not be acceptable in payment of taxes. 2.4 Bearer securities with interest coupons attached, a n d s e c u r i t i e s r e g i s t e r e d a s t o p r i n c i p a l a n d i n t e r e s t , w ill be issued in denominations of $5,000, $10,000, $ 1 0 0 , 0 0 0 a n d $ 1 , 0 0 0 ,0 0 0 . B o o k - e n t r y s e c u r i t i e s w ill b e available to eligible bidders in multiples o f those a m o u n ts . I n te r c h a n g e s o f s e c u r itie s o f d iffe r e n t d e n o m inations and o f coupon, registered and book-entry s e c u r i t i e s , a n d t h e t r a n s f e r o f r e g i s t e r e d s e c u r i t i e s w ill b e permitted. 2.5 The securities will be subject to the general reg ulations of the Department of the Treasury governing United States securities, now or hereafter prescribed. SALE P R O C E D U R E S 3.1 Tenders will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D.C. 20226, up to 1:30 p.m., Eastern Standard time, Monday, December 20, 1976. Non competitive tenders, as defined below, will be considered timely ifpostmarked no later than Friday, December 17, 1976. 3.2 Each tender must state the face amount of securities bid for, which must be $5,000 or a multiple thereof. Competitive tenders must show the yield desired, expressed in terms of an annual yield with two decimals, e.g., 7.11%. Common fractions may not be used. Non competitive tenders must show the term “noncompeti tive” on the tender form in lieu of a specified yield. No bidder may submit more than one noncompetitive tender, and the amount may not exceed $1,000,000. 3.3 Commercial banks, which for this purpose are defined as banks accepting demand deposits, and primary dealers, which for this purpose are defined as dealers who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York their positions with respect to Government securities and borrowings thereon, may submit tenders for account of customers, provided the names of the customers and the amount for each customer are furnished. Others will not be permitted to submit tenders except for their own account. 3.4 Tenders will be received without deposit for their own account from commercial banks and other banking institutions; primary dealers, as defined above; Federally-insured savings and loan associations; States and 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; Federal Reserve Banks; and Government accounts. Tenders from others must be accompanied by a deposit of 5% of the face amount of securities applied for (in the form of cash, maturing Treasury securities or readily collectible checks), or by a guarantee of such de posit by a commercial bank or a primary dealer. 3.5 Immediately after the closing hour, tenders will be opened, following which public announcement will be made of the amount and yield range of accepted bids. Subject to the reservations expressed in Section 4, noncompetitive tenders will be accepted in full at the [Ref. Cir, No. 8011] (Over) average price (in three decimals) of accepted competitive tenders, and competitive tenders with the lowest yields will be accepted to the extent required to attain the amount offered. Tenders at the highest accepted yield will be prorated ifnecessary. After the determination is made as to which tenders are accepted, a coupon rate will be determined at a 1/8 of one percent increment that translates into an average accepted price close to 100.000 and a lowest accepted price above the original issue discount limit of 99.500.That rate ofinterest will be paid on all of the securities. Based on such interest rate, the price on each competitive tender allotted will be deter mined and each successful competitive bidder will be required to pay the price corresponding to the yield bid. Price calculations will be carried to three decimal places on the basis of price per hundred, e.g., 99.923, and the determinations of the Secretary of the Treasury shall be final. Ifthe amount of noncompetitive tenders received would absorb all or most of the offering, competitive tenders will be accepted in an amount sufficient to pro vide a fair determination of yield. Additional tenders received from Government accounts and Federal Reserve Banks will be accepted at the average price of accepted competitive tenders. 3.6 Those submitting competitive tenders will be advised of the acceptance or rejection thereof. Those submitting noncompetitive tenders will not be notified except when the tender isnot accepted in full or when the price is over par. 4. R E SE R V A T IO N S 4.1 The Secretary of the Treasury expressly re serves the right to accept or reject any or all tenders in whole or in part, to allot more or less than the amount of securities specified in Section 1, and to make different percentage allotments to various classes of applicants when he deems it to be in the public interest, and his action in any such respect shall be final. 5. P A Y M E N T A N D D E L IV E R Y 5.1 Except as otherwise stipulated, settlement for securities allotted hereunder must be made or completed on or before Friday, December 31, 1976, at the Federal Reserve Bank or Branch, or the Bureau of the Public Debt wherever the tender was submitted. Payment must be in’cash; in other funds immediately available to the Treasury; in Treasury bills, notes or bonds (with all coupons detached) maturing on or before the settlement date but which are not overdue as defined in the general regulations governing United States securities; or by check drawn to the order of the institution to which the tender was submitted, which must be received at such institution no later than: (a) Tuesday, December 28, 1976, if the check is drawn on a bank in the Federal Reserve District of ' the institution to which the check is submitted (the Fuui Federal Reserve District in case of the Bureau ot the Public Debt), or (b) Monday, December 27, 1976, if the check is drawn on a bank in another Federal Reserve District. Checks received after the dates set forth in the preceding sentencewillnotbe accepted unless they are payable atthe applicable Federal Reserve Bank. Some Federal Reserve Banks and Branches and the Bureau of the Public Debt will be closed on December 31. Settlement for accepted tenders at those offices must be completed no later than Monday, January 3, 1977, with payment including three days’ accrued interest unless settlement is made with Treasury securities maturing on or before December 31, 1976. If, however, settlement is completed by Thursday, December 30, 1976, there willbe no accrued interest due. 5.2 Payment will not be deemed to have been com pleted where registered securities are requested if the appropriate identifying number as required on tax returns and other documents submitted to the Internal Revenue Service (an individual’s social security number or an employer identification number) is not furnished. When payment is made in securities, a cash adjustment will be made to or required of the bidder for any differ ence between the face amount ofsecurities presented and the amount payable on the securities allotted. 5.3 In every case where full payment is not com pleted on time, the deposit submitted with the tender, up to 5 percent of the face amount of securities allotted, shall, at the discretion of the Secretary of the Treasury, be forfeited to the United States. 5.4 Registered securities tendered as deposits and in payment for securities allotted hereunder are not re quired to be assigned ifthe new securities are to be regis tered in the same names and forms as appear in the registrations or assignments of the securities surren dered. Specific instructions for the issuance and delivery of the new securities, signed by the owner or his autho rized representative, must accompany the securities pre sented. Otherwise, the presented securities should be assigned by the registered payees or assignees thereof in accordance with the general regulations governing United States securities, as hereinafter set forth. When the new securities are to be registered in names and forms different from those in the inscriptions or assign ments of the securities presented, the assignment should be to “The Secretary of the Treasury for (securities offered herein) in the name of (name and taxpayer identifying number).” Ifnew securities in coupon form are desired, the assignment should be to “The Secretary of the Treasury for coupon (securities offered herein) to be delivered to (name and address).” Securities tendered in payment should be surrendered to the Federal Reserve Bank or Branch or to the Bureau of the Public Debt, Washington, D.C. 20226. The securities must be de livered at the expense and risk of the holder. 5.5 I f b e a r e r s e c u r itie s are n o t r e a d y fo r d e liv e r y on the settlement date, purchasers may elect to receive in te r im c e r tific a te s . T h e s e c e r tific a te s s h a ll b e is s u e d in bearer form and shall be exchangeable for the securities o ffe r e d h e r e in , w h e n su c h s e c u r itie s are a v a ila b le , a t any Federal Reserve Bank or Branch, or at the Bureau of the P u b lic D e b t, W a s h in g t o n , D .C . 20226. The in te r im certificates must be returned at the risk and expense of th e h o ld e r . 5.6 Delivery of securities in registered form will be made after the requested form of registration has been validated, the registered interest account has been established and the securities have been inscribed. 6. G EN ER A L PR O V ISIO N S 6.1 As fiscal agents of the United States, Federal Reserve Banks are authorized and requested to receive tenders, to make such allotments as may be prescribed by the Secretary of the Treasury, to issue such notices as may be necessary, to receive payment for and make delivery ofsecurities on full-paid allotments, and to issue interim certificates pending delivery of the definitive securities. 6.2 The Secretary ofthe Treasury may at any time, or from time to time, prescribe supplemental or amendatory rules and regulations governing the offering, which will be communicated promptly to the Federal Reserve Banks. WILLIAM E. SIMON, S ecretary o f the Treasury. IMPORTANT — Closing time for receipt of this tender is 1:30 p.m., Monday, December 20,1976. TEN DER FOR TR EASU R Y NOTES OF SERIES U-1978 D ue D ecem ber 3 1 ,1 9 7 8 Dated FED ER A L RESERV E BANK OF NEW Y O R K , F is c a l A g e n t o f th e U n it e d S ta te s , N e w Y o r k , N .Y . 1 0 0 4 5 a t .......................................................................................... ..................................... IQ The undersigned hereby offers to purchase United States ot America Treasury Notes of Series U-1978 in the am ount indicated below, and agrees to make payment theretor at );our Bank on or before the issue date at the price awarded on this tender. NONCOMPETITIVE TENDER Do not fill in both Competitive and Noncompetitive tenders on one form C O M P E T IT IV E T E N D E R in in s c r ib in g th e s e c u r it ie s a n d e s t a b lis h in g a n d s e r v ic in g th e o w n e r s h ip a n d in te r e s t r ec o r d s. T h e tr a n s a c t io n w ill n o t b e c o m p le t e d u n le s s all r e q u ir e d d a t a is fu r n is h e d . r eg iste r e d s e c u r itie s Ii — T h e in d iv id u a lly id e n t if ia b le in f o r m a t io n r e q u ir e d o n th is fo r m is n e c e s s a r y t o p e r m it t h e s u b s c r ip tio n t o b e p r o c e s s e d a n d th e s e c u r it ie s t o b e is s u e d . PRIVACY ACT STATEMENT a re r e q u e s te d , th e r e g u la tio n s g o v e r n in g U n it e d S t a t e s s e c u r itie s (D e p a r tm e n t C ir c u la r N o . 3 0 0 ) a n d th e o f f e r in g c ir c u la r r e q u ir e s u b m is s io n o f s o c ia l s e c u r ity n u m b e r s; th e n u m b e r s a n d o th e r in lo r m a t io n a re u sed D ated D ecem ber 3 1 ,1 9 7 6 $ ..............................................................(maturity value) or any lesser am ount that may be awarded. Y ie ld :........ $ ..............................................................(maturity value) (Not to exceed S i.000.000 for one bidder through all sources) at the average price of accepted competitive bids. (Yield must be expressed with not more than two decimal places, for example. 7.11) Subject to allotment, please issue, deliver, and accept payment for the securities as indicated below and on the reverse side (if registered securities are desired, please also complete schedule on reverse side). P ie c e s D e n o m in a t io n xxxxxx XXX M a tu r ity v a lu e XXX XXX XXX EE EE | $ | 1. D e liv e r o v e r u n d e r s ig n e d th e co u n ter 2. S h ip t o th e u n d e r s ig n e d 3. H o ld in s a f e k e e p in g (fo r to P a y m e n t w ill b e m a d e a s fo llo w s : | | B y c h a r g e t o o u r r ese rv e a c c o u n t th e [EJ 1 0 ,0 0 0 Q 1 0 0 ,0 0 0 immediately available funds E] b a n k o n ly ) in — PI I n v e s tm e n t A c c o u n t EJ G en eral A ccou n t 5 ,0 0 0 B y c a sh o r c h e c k in m em b er i— i 4 . H o ld a s c o lla te r a l to r T r e a s u r y T a x By s u r r e n d e r o f m a t u r in g s e c u r itie s o . s p e c ia l ln s ir u c u o n s L- J and Loan A ccou n t * (No changes in deliver}’ instructions will be accepted) 1 ,0 0 0 ,0 0 0 Totals * T h e u n d e r s ig n e d c e r tifie s t h a t th e a llo t t e d s e c u r it ie s w ill b e o w n e d s o le ly b y th e u n d e r s ig n e d . ( I f a c o m m e r c ia l b a n k or d e a le r is s u b s c r ib in g fo r its o w n a c c o u n t o r fo r a c c o u n t o f c u s t o m e r s , th e fo llo w in g c e r t if ic a t io n s a r e m a d e a p a r t o f th is t e n d e r .) WE HEREBY CERTIFY that we have received tenders from our customers in the amounts set forth opposite the customers’ names on the list which is made a part of this tender, and that we have either received and are holding for the Treasury or we guarantee payment to the Treasury of deposits stipulated in the official offering circular. WE FURTHER CERTIFY that tenders received by us, if any, from other commercial banks for their own account and for the account of their customers have been entered with us under the same conditions, agree ments, and certifications as set forth in this form. (Name of subscriber — please prim or (ype) I n s e r t th is te n d e r in sp e c ia l en velo p e m a rk e d “ T e n d e r f o r T reasury N o te s o r B o n d s ” (Tel. No.) (Address — inel. City and State) (Signature of subscriber or authorized signature) (Title ofauthorized signer) ( I n s titu tio n s s u b m it t in g te n d e r s fo r c u s to m e r a c c o u n t m u s t lis t c u s t o m e r s ’ n a m e s o n lin e s b e lo w o r o n a n a t t a c h e d rid er) (Name of customer) (Name of customer) IN S T R U C T IO N S : 1. N o te n d e r fo r le ss th a n $ 5 ,(XX) w ill b e c o n s id e r e d ; a n d e a c h t e n d e r m u s t b e fo r a m u lt ip le o f $ 5 ,0 0 0 ( m a tu r ity v a lu e ). 2 O n ly b a n k in g in s tit u tio n s , a n d d e a le r s w h o m a k e p r im a r y m a r k e ts in G o v e r n m e n t s e c u r it ie s a n d r ep o rt d a ily to th is B a n k th eir p o s itio n s w ith r e s p e c t to G o v e r n m e n t s e c u r itie s a n d b o r r o w in g s t h e r e o n , m a y s u b m it t e n d e r s fo r c u s t o m e r a c c o u n t: in d o in g s o , th e y m a y c o n s o lid a t e c o m p e tit iv e te n d e r s at the same yield a n d m a y c o n s o lid a t e n o n c o m p e t it iv e t e n d e r s , p r o v id e d a list is a t t a c h e d s h o w in g t h e n a m e o f e a c h b id d e r a n d th e a m o u n t b id fo r h is a c c o u n t . O th e r s w ill n o t b e p e r m itt e d t o s u b m it t e n d e r s e x c e p t to r th e ir o w n a c c o u n t . 3 T e n d e r s w ill b e r e c e iv e d w ith o u t d e p o s it fr o m c o m m e r c ia l a n d o t h e r b a n k s fo r th e ir o w n a c c o u n t , f e d e r a lly -in s u r e d s a v in g s a n d lo a n a s s o c ia tio n s , S ta te s , p o litic a l s u b d iv is io n s o r in s t r u m e n t a lit ie s th e r e o f, p u b lic p e n s io n a n d r e t ir e m e n t a n d o t h e r p u b lic fu n d s , in t e r n a t io n a l o r g a n iz a tio n s in w h ic h th e U n it e d S t a t e s h o ld s m e m b e r s h ip , fo r e ig n c e n t r a l b a n k s a n d fo r e ig n S t a t e s , d e a le r s w h o m a k e p r im a r y m a r k e ts in G o v e r n m e n t s e c u r itie s a n d r e p o r t d a ily t o t h e F e d e r a l R e s e r v e B a n k o f N e w Y o r k th e ir p o s it io n s w ith r e s p e c t t o G o v e r n m e n t s e c u r itie s a n d b o r r o w in g s th e r e o n , a n d G o v e r n m e n t a c c o u n t s . T e n d e r s fr o m o t h e r s m u st b e a c c o m p a n ie d b y p a y m e n t o t 5 p e r c e n t o f th e fa c e a m o u n t o f th e s e c u r itie s a p p lie d to r. 4. P a y m e n t m u s t b e c o m p le te d b y D e c e m b e r 3 1 . 1 9 7 b . I f p a y m e n t is by c h e c k d r a w n o n a b a n k in th is D is tr ic t , it m u st b e r e c e iv e d by D e c e m b e r 2 8 . 197 6 : c h e c k s d r a w n o n a b a n k in a n o t h e r D is tr ic t m u s t b e r e c e iv e d b y D e c e m b e r 2 7 . 19 7 b . A ll c h e c k s m u s t b e d r a w n to th e o r d e r o f th e F e d e r a l R e se r v e B a n k o f N e w Y o r k ; c h e c k s e n d o r s e d to th is B a n k w ill n o t b e a c c e p t e d . 5. I f th e la n g u a g e o f th is te n d e r is c h a n g e d in a n y r e s p e c t th a t, in t h e o p in io n o f th e S e c r e ta r y o f th e T r e a s u r y , is m a t e r ia l, th e te n d e r m a y b e d is r e g a r d e d . lE n c .C ir. 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