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F E D E R A L R E S E R V E BAN K O F N EW Y O R K Fiscal Agent of the United States 8 13 [ Circular No. 1977 I n June 21, J T R E A S U R Y TO A U C T IO N $1,500 M ILLION OF 15-Y E A R 1-M ONTH BONDS To All Banking Institutions, and Others Concerned, in the Second Federal Reserve District: The following statement was issued yesterday by the Treasury Department: The Department of the Treasury will auction $1,500 million of 15-year 1-month bonds to raise new cash. Additional amounts of the bonds may be issued to Federal Reserve Banks as agents of foreign and interna tional monetary authorities at the average price of accepted tenders. Printed on the reverse side is a table summarizing the highlights of the offering. Copies of the official offering circular will be furnished upon request. Bidders submitting noncompetitive tenders 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 for the securities. If payment 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. Enclosed is a copy of the form to be used in submitting tenders. If there is any doubt that ten ders sent by mail will reach this Bank or its Branch on time, bidders should use other means of transmitting their tenders. A recorded message (at the Head Office — Tel. No. 212-791-5823; at the Buffalo Branch — Tel. No. 716-849-5046) provides information about this and other Treasury offerings; additional inquiries regarding this offering may be made by calling, at the Head Office, Tel. No. 212-791-6619 or 212-791-5465, or, at the Buffalo Branch, Tel. No. 716-849-5016. P aul A. V olcker , President. ( over) HIGHLIGHTS OF TREASURY OFFERING TO THE PUBLIC OF 15-YEAR 1-MONTH BONDS TO BE ISSUED JULY 8, 1977 Amount Offered: To the public .............................. $1,500 million Description of Security: Term and type of security.......... 15-year 1-month bonds Series and CUSIP designation ... Bonds of 1992 (C U SIP No. 912810 BY3) Maturity date .............................. August 15, 1992 Call date........................................ No provision Interest coupon ra te .................... To be determined, based on the average of accepted bids Investment yield .......................... To be determined at auction Premium or discount .................. To be determined after auction Interest payment dates................ February 15 and August 15 (first payment on February 15, 1978) Minimum denomination available $1,000 Terms of Sale: Method of sale.................................................. Yield auction Accrued interest payable by investor............ None Preferred allotment ......................................... Noncompetitive bid for $1,000,000 or less Deposit requirement........................................ 5°/o of face amount Deposit guarantee by designated institutions Acceptable Key Dates: Deadline for receipt of tenders............................................................................ Tuesday, June 28, 1977, by 1 :30 p.m., EDST Settlement date (final payment due) a) Cash or Federal fu n d s.................................................................................... Friday, July 8, 1977 b) Check drawn on bank within FRB district where submitted................... Tuesday, July 5, 1977 c) Check drawn on bank outside FRB district where submitted ................. Triday, July 1, 1977 Delivery date for coupon securities...................................................................... Thursday, July 14, 1977 UNITED STATES OF AMERICA TREASURY BONDS OF 1992 DEPARTMENT CIRCULAR Public Debt Series - No. 15-77 1. 1. DEPARTMENT OF THE TREASURY, OFFICE OF THE SECRETARY, Washington, June 21, 1977. 1. INVITATION FOR TENDERS The Secretary of the Treasury, under the authority of the Second Liberty Bond Act, as amended, invites tenders for approximately $1,500,000,000 of United States securities, designated Treasury Bonds of 1992 (CUSIP No. 912610 BY 3). The securities will be solo at auction with bidding on the basis of yield. Payment will be required at the price equivalent of the bid yield of each accepted tender. The interest rate on the securities and the price equivalent of each accepted bid will be determined in the manner described below. Additional amounts of these securities may be issued for cash to Federal Reserve Banks as agents of foreign and international monetary authorities. 2. 2. 1. DESCRIPTION OF SECURITIES The securities will be dated July 6, 1977, and will bear interest from that date, payable on a semiannual basis on February 15, 1976, and each subsequent 6 months on August 15 ano February 15 until the principal becomes payable. They will mature August 15, 1992, and will not be subject to call for redemption prior to maturity. 2. 2. The income derived from the securities is subject to all taxes imposed under the Internal Revenue Code of 1954. The securities 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, any possession of the United States, or any local taxing authority. 2. 3. The securities will be acceptable to secure deposits of public monies. payment of taxes. They will not be acceptable in -2 - 2. 4. Bearer securities with interest coupons attached, and securities registered as to principal and interest, will be issued in aenominations of $1,000, $5,000, $10,000, $100,000, and $1,000,000. Book-entry securities will be available to eligible bidders in multiples of those amounts. Interchanges of securities of aifferent denominations and of coupon, registered, and book-entry securities, and the transfer of registered securities will be permitted. 2. 5. The Department of the Treasury's general regulations governing United States securities apply to the securities offered in this circular. These general regulations include those currently in effect, as well as those that may be issued at a later date. 3. 3. 1. SALE PROCEDURES 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 Daylight Saving time, Tuesday, June 2u, 1977. Noncompetitive tenders as defined below will be considered timely if postmarked no later than Monday, June 27, 1977. 3. 2. Each tender must state the face amount of securities bid for. The minimum bio is $1,000 and larger bids must be in multiples of that amount. Competitive tenders must also show the yield desired, expressed in terms of an annual yield with two decimals, e.g., 7.11%. Common fractions may not be usea. Noncompetitive tenders must show the term "noncompetitive" 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 in and borrowings on such securities, may submit tenders for account of customers if the names of the customers and the amount for each customer are furnished. own account. Others are only permitted to submit tenders for their 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 their political subdivisions or instrumentalities; 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 aeposit 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 deposit by a commercial bank or a primary dealer. 3. 5. Immediately after the closing hour, tenders will be opened, followed by a public announcement 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 weighted 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 if necessary. After the determination is made as to which tenders are accepted, a coupon rate will be established, on the basis of a 1/8 of one percent increment, which results in an equivalent average accepted price close to 100.000 and a lowest accepted price above the original issue discount limit of 96.250. That rate of interest will be paid on all of the securities. Based on such interest rate, the price on each competitive tender allotted will be determined and each successful competitive bidder will be required to pay the price equivalent 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. If the amount of noncompetitive tenders received would absorb all or most of the offering, competitive tenders will be accepted in an amount sufficient to provide a fair aetermination of the yield. Tenders received from Government accounts and Federal Reserve Banks will be accepted at the weighted average price of accepted competitive tenders. 3. 6. Competitive bidders will be advised of the acceptance or rejection of their tenders. Those submitting noncompetitive tenders will only be notified if the tender is not accepted in full or when the price is over par. 4. 4. 1. RESERVATIONS The Secretary of the Treasury expressly reserves 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 the Secretary considers it in the public interest. The Secretary's action under this Section is final. b. 1. 5. PAYMENT AND DELIVERY Settlement for allotted securities must be made or completed on or before Friday, July 8, 1977, at the Federal Reserve Bank or Branch or at 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, July b, 1977, if the check is drawn on a bank in the Federal Reserve District of the institution to which the check is submitted (the Fifth Federal Reserve District in case of the Bureau of the Public Debt), or (b) Friday, July 1, 1977, if the check is drawn on a bank in another Federal Reserve District. -5 - Checks received after the dates set forth in the preceding sentence will not be accepted unless they are payable at the applicable Federal Reserve Bank. Payment will not be considered complete 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. Wnen payment is made in securities, a cash adjustment will be made to or required of the bidder for any difference between the face amount of securities presented and the amount payable on the securities allotted. b. 2. In every case where full payment is not completed on time, the deposit submitted with the tender, up to b percent of the face amount of securities allotted, shall, at the discretion of the Secretary of the Treasury, be forfeited to the United States. b. 3. Registered securities tendered as deposits and in payment for allotted securities are not required to be assigned if the new securities are to be registered in the same names and forms as appear in the registrations or assignments of the securities surrendered. Vvhen the new securities are to be registered in names and forms different from those in the inscriptions or assignments of the securities presented, the assignment should be to "Tne Secretary of the Treasury for (securities offered by this circular) in the name of (name and taxpayer identifying number)." If new securities in coupon form are desired, the assignment should be to "The Secretary of the Treasury for coupon (securities offered by this circular) to be delivered to (name and address)." Specific instructions for the issuance and delivery of tne new securities, signed by the owner or authorized representative, must accompany the securities presented. 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 delivered at the expense and risk of the holder. -6 - 5. 4. If bearer securities are not ready for delivery on the settlement date, purchasers may elect to receive interim certificates. These certificates shall be issued in bearer form and shall be exchangeable for aefinitive securities of this issue, when such securities are available, at any Federal Reserve Bank or Branch or at the Bureau of the Public Debt, Washington, D. C. 2022b. The interim certificates must be returned at the risk and expense of the holder. b. b. Delivery of securities in registered form will be maae after the requested form of registration has been validated, the registered interest account has been established, and the securities have been inscribea. b. GENERAL PROVISIONS t. 1. As fiscal agents of the Unitea States, Federal > Reserve Banks are authorized and requested to receive tenders, to make allotments as airectea by the Secretary of the Treasury, to issue such notices as may be necessary, to receive payment for and make aelivery of securities on full-paid allotments, and to issue interim certificates pending delivery of the definitive secur it ies. b. 2. The Secretary of the Treasury may at any time issue supplemental or amendatory rules and regulations governing the offering. Public announcement of such changes will be promptly proviaea. W. Michael Blumenthal, Secretary of the Treasury.