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FED ER A L RESERVE BANK OF N EW YORK Fiscal Agent of the United States PCircular No. 8198 |_ October 13, 1977 T R E A S U R Y T O A U C T IO N $3,500 M IL L IO N O F 2 -Y E A R N O T E S To All Banking Institutions, and Others Concerned, in the Second Federal Reserve District: The follow ing statement was issued yesterday by the Treasury Departm ent: The Department o f the Treasury will auction $3,500 million o f 2-year notes to refund $2,938 million of notes held by the public maturing October 31, 1977, and to raise $562 million new cash. Additional amounts o f these notes may be issued at the average price o f accepted tenders to Government accounts and to Federal Reserve Banks for their own account in exchange for $218 million maturing notes held by them, and to Federal Reserve Banks as agents o f foreign and international monetary authorities for new cash only. Printed on the reverse side is a table sum m arizing the highlights o f the offering. Copies o f the official offering circular will be furnished upon request directed to our G overnm ent Bond Division (Tel. No. 212-791-6356). Bidders subm itting noncom petitive tenders should realize that it is possible that the average price may be above par, in which case they would have to pay m ore than the face value for the securities. If paym ent is m ade by check, the check should be a certified personal check or an official bank check, payable on its face to the Federal Reserve Bank o f New Y ork; checks endorsed to this Bank will not be accepted. Enclosed is a copy o f the form to be used in subm itting tenders. If there is any dou bt that tenders sent by mail will reach this Bank or its Branch on time, bidders should use other means o f transmitting their tenders. A recorded message (at the Head O ffice — Tel. No. 212-791-5823; at the B uffalo Branch — Tel. No. 716-849-5046) provides inform ation about this and other Treasury offerings; additional inquiries regarding this offering may be m ade by calling, at the Head O ffice, Tel. No. 212-791-6619 or 212-791-5465, or, at the B uffalo Branch, Tel. No. 716-849-5016. PAUL A. VOLCKER, President. (Over) HIGHLIGHTS OF TREASURY OFFERING TO THE PUBLIC OF 2-YEAR NOTES TO BE ISSUED OCTOBER 31, 1977 Amount Offered: To the public................................. $3,500 million Description of Security: Term and type o f security.......... 2-year notes Series and CUSIP designation .. Series V-1979 (CUSIP No. 912827 HC9) Maturity d a t e .............................. . October 31, 1979 Call date ....................................... No provision Interest coupon rate...................... To be determined, based on the average o f accepted bids Investment y ie ld ............................ To be determined at auction Premium or discou n t.................... To be determined after auction Interest payment dates.................. April 30 and October 31 Minimum denomination available $5,000 Terms of Sale: Method o f sale ............................................... Yield auction Accrued interest payable by investor.......... None Preferred allotment ........................................ Noncompetitive bid for $1,000,000 or less Deposit requirement........................................ 5% o f face amount Deposit guarantee by designated institutions Acceptable Key Dates: Deadline for receipt o f tenders............................................................................. Tuesday, October 18, 1977, by 1:30 p.m., EDST Settlement date (final payment due) a) Cash or Federal funds................................................................................... Monday, October 31, 1977 b) Check drawn on bank within FRB district where submitted.................. Thursday, October 27, 1977 c) Check drawn on bank outside FRB district where subm itted................ Tuesday, October 25, 1977 Delivery date for coupon securities Monday, October 31, 1977 UNITED STATES OF AMERICA TREASURY wOTES OF OCTOBEk 3l, 19 79 SERIES V-1979 DEPARTMENT CIRCULAR P u d I i c Debt Series - 1. 1. D E P A R T M E N T OF T H E TREASURY, No. 24-77 OFFICE OF THE SECRETARY, W a s h ington, October 13, 1977. 1. INVITATION FOR TENDERS Tne Secretary of tne Treasury, under the authority of the Second Liberty Bond Act, as amended, invites tenders for approximately S3,5U0,000,U00 of United States securities, designated Treasury Notes of October 31, 1979, Series V-1979 (CUSIP No. 912827 HC 9). The securities will be sold at auction witn oidding 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 oelow. Additional amounts of these securities may be issued to Government accounts and Federal Reserve BanKS for their own account in exchange for maturing Treasury securities. Additional amounts may also be issued for cash to Federal Reserve Banks as agents of foreign and international monetary authorities. 2. DESCRIPTION OF SECURITIES 2. 1. The securities will be dated October 31, 1977, and will Dear interest from that date, payable on a semiannual basis on April 30, 1978, and each subsequent 6 months on October 31 and April 30 until the principal becomes payable. Tney will mature October 31, 1979, and will not be subject to call for redemption prior to maturity. 2. 2. Tne 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, whetner 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 iocai taxing authority. - 2 - 2. 3. The securities will De acceptable to secure deposits of puolic monies. They will not be acceptable in payment of taxes. 2. 4. Bearer securities with interest coupons attached, and securities registered as to principal and interest, will be issued in denominations of $5,000, $10,000, $100,000, and $i,000,00u. Book-entry securities will oe available to eligible bidders in multiples of those amounts. Interchanges of securities of different denominations and of coupon, registered and book-entry securities, and tne transfer of registered securities will be permitted. 2. 5. Tne Department of the Treasury's general regulations governing United States securities apply to the securities offered in tnis circular. These general regulations include tnose currently in effect, as well as those that may oe 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, October Id, 1577. Noncompetitive tenders as defined oelow will be considered timely if postmarked no later than Monday, October 17, 1977. 3. 2. Each tender must state the face amount of securities bid for. The minimum bid is $5,000 and larger bids must be in multiples of that amount. Competitive tenders must also show tne yield desired, expressed in terms of an annual yield with two decimals, e.g., 7.11%. Common fractions may not be used. Noncompetitive tenders must snow the term "noncompetitive" on tne tender form in lieu of a specified yield. No bidder may submit more than one noncompetitive tender and tne amount may not exceed $1,000,000. 3. 3. All bidoers must certify tnat tney have not made and will not make any agreements for the sale or purcnase of any securities of tnis issue prior to the deadline established in Section 3.1. for receipt of tenders. Those autnorized to submit tenders for the account of customers will be required to certify - 3 - ,that such tenaers are submitted under the same conditions, agree ments, and certifications as tenders submitted directly by bidders tor their own account. 3. 4. Commercial banks, which for tnis purpose are defined as banks accepting demand deposits, and primary dealers, which for tnis purpose are defined as dealers who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York tneir positions in and borrowings on such securities, may submit tenders for account of customers if the names of the customers and the amount for eacn customer are furnished. Others are only permitted to submit tenders for their own account. 3. 5. 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 oe 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 cnecKs), or by a guarantee of such deposit by a commercial banK or a primary dealer. 3. 6. Immediately after the closing nour, 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, wnicn results in an equivalent average accepted price close to 1U0.000 and a lowest accepted price above the original issue discount limit of - 99.500. 4 - That rate of interest will be paid on all of the securities. Based on such interest rate, the price on each competitive tenaer 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 oasis of price per nundred, e.g., 99.923, and the determinations of the Secretary of tne Treasury shall be final. If the amount of noncompetitive tenders received would adsorb all or most of the offering, competitive tenders will be accepted in an amount sufficient to provide a fair determination 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. 7. 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. RESERVATIONS 4. 1. 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 tnan tne amount of securities specified in Section 1, and to make different percentage allotments to various classes of applicants when the Secretary considers it in tne public interest. The Secretary's action under this Section is final. 5. PAYMENT AND DELIVERY 5. 1. Settlement for allotted securities must oe made or completed on or before Monday, October 31, 1977, at tne federal Reserve Bank or Branch or at the Bureau of the Public Debt, wherever the tender was submitted. Payment must’oe 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 m the general regulations governing United States securities; or by check drawn to the order of the institution to which tne tender was suomitted, which must be received at such institution no later tnan: - 5 - (a) Thursday, October 27, 1977, if the check is arawn on a bank in the Federal Reserve District of the institution to wnich the check is submitted (tne Fifth Federal Reserve District in case of the Bureau of the Public Debt), or (b) Tuesday, October 2b, 1977, if the check is drawn on a bank in another Federal Reserve District. Cnecks received after the dates set fortn 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 tne appropriate identifying number as required on tax returns and other documents submitted to tne 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 Didder for any difference between tne face amount of securities presented and the amount payaole on the securities allotted. 5. 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. 5. 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 tne registrations or assignments of the securities surrendered. When the new securities are to be registered in names and forms different from tnose in the inscriptions or assignments of tne 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 numoer)." If new securities in coupon form are aesired, 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 -6issuance and delivery of tne new securities, signed by the owner or authorized representative, must accompany the securities presented. Securities tendered in payment snould be surrendered to the Federal Reserve Bank or Brancn or to the Bureau of the Puolic Debt, Wasnington, D. C. 20226. The securities must De delivered at the expense and risx of the holder. 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 snail be exchangeable for definitive 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. 20226. The interim certificates must be returned at tne risk and expense of the holder. 5. 5. 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 nave been inscribed. 6. GENERAL PROVISIONS 6. 1. As fiscal agents of the United States, Federal Reserve Banks are authorized and requested to receive tenders, to make allotments as directed by the Secretary of tne Treasury, to issue such notices as may be necessary, to receive payment for and make delivery of securities on full-paid allotments, and to issue interim certificates pending delivery of the definitive securities. 6. 2. 'The Secretary of tne Treasury may at any time issue supplemental or amendatory rules and regulations governing the offering. Public announcement of such changes will be promptly provided. Paul H. Taylor, Acting Fiscal Assistant Secretary. IMPORTANT — Closing time for receipt of this tender is 1:30 p.m., Tuesday, October 18, 1977 TENDER FO R TREASU RY NOTES OF SERIES V-1979 Due October 31, 1979 Dated at FEDERAL RESERVE BANK OF NEW Y O R K . Fiscal Agent of the United States, New York. N.Y. 10045 , 19 . . The undersigned hereby offers to purchase the above-described United States of America Treasury Notes of Series V-1979 in the amount indicated below, and agrees to make payment therefor at your Bank on or before the issue date at the price awarded on this tender. Do not fill in both Competitive and Noncompetitive tenders on one form COMPETITIVE TENDER in inscribing the securities and establishing and servicing the ownership and interest records. The transaction will not be completed unless all required data is furnished. The individually identifiable information required on this form is necessary to permit the subscription to be processed and the securities to be issued. If registered securities PR IV A C Y ACT ST A T E M E N T are requested, the regulations governing United States securities (Department Circular No. 300) and the offering circular require submission of social security numbers; the numbers and other information are used Dated October 31, 1977 $ ............................................................ (maturity value) or any lesser amount that may be awarded. Yield:........ (Yield must be expressed with not more than two decimal places, for example, 7.11) NONCOMPETITIVE TENDER $ ............................................................(maturity value) (Not to exceed SI,000.000for one bidder through all sources) at the average price of accepted competitive bids. 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): 100,000 XXX 1. Deliver over the counter to the undersigned | | 2. Ship to the undersigned ] 3 . Hold in safekeeping (for member bank only) in — Investment Account General Account Payment will be made as follows: ) By charge to our reserve account ] By cash or check in immediately 10,000 Pieces | | 4. Hold as collateral for Treasury Tax ^ Denomination xxxxxx $ Maturity value XXX XXX 5,000 XXX [~ 1 ~ available funds ] By surrender of maturing securities ^Pec'a* instructions and Loan Account * 1,000,000 (No changes in delivery instructions will be accepted) Totals * The undersigned certifies that the allotted securities will be owned solely by the undersigned. (If a commercial bank or dealer is subscribing for its own account or for account of customers, the following certifications are made a part of this tender.) WF. HEREBY CERTIFY that we have not made and will not make any agreements for the sale or purchase of any securities of this issue prior to 1:30 p.m., Tuesday, October 18, 1977. WE FURTHER CERTIFY that we have received tenders from customers in the amounts set forth opposite their names on the list which is made a part of this tender, and that we have received and are holding for the Treasury, or that we guarantee payment to the Treasury, of the deposits stipulated in the official offering circular. WE FURTHER CERTIFY that tenders received by us, if any, from other commercial banks or primary dealers for their own account, and for the account of their customers, have been entered with us under the same conditions, agreements, and certifications set forth in this form. (Name of subscriber — please print or type) I n s e r t th is te n d e r in s p e c i a l e n v e lo p e m a r k e d (Address — incl. City and State) (Tel. No.) “ T e n d e r fo r T re a s u ry N o te s o r B o n d s ” (Signature of subscriber or authorized signature) (Title of authorized signer) (Institutions submitting tenders for customer account must list customers’ names on lines below or on an attached rider) (Name of customer) (Name of customer) INSTRUCTIONS: 1. No tender for less than $5,000 will be considered; and each tender must be for a multiple of $5,000 (maturity value). 2. Only banking institutions, and dealers who make primary markets in Government securities and report daily to this Bank their positions with respect to Government securities and borrowings thereon, may submit tenders for customer account; in doing so, they may consolidate competitive tenders at the same yield and may consolidate noncompetitive tenders, provided a list is attached show ing the name ot each bidder and the amount bid tor his account. Others will not be permitted to submit tenders except for their own account. 3. 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 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, and Government accounts. Tenders from others must be accompanied by payment of 5 percent of the face amount of the securities applied for. 4. Payment must be completed by October 31, 1977. If payment is by check drawn on a bank in this District, it must be received by October 27, 1977; checks drawn on a bank in another District must be received by October 25, 1977. All checks must be drawn to the order of the Federal Reserve Bank of New York; checks endorsed to this Bank will not be accepted. 5. If the language of this tender is changed in any respect that, in the opinion of the Secretary of the Treasury, is material, the tender may be disregarded. [Enc. Cir. No. 8198] (OVER) SUBSCRIPTION NO. SCHEDULE FOR ISSUE OF REGISTERED TREASURY NOTES OF SERIES V-1979 D E LIV E R Y INSTRUCTIONS PAYM ENT INSTRUCTIONS S L 'B S C R IB E R _ n DELIVER OVER THE COUNTER □ S IG N A T U R E _ □ s h ip A D D R E S S ____ □ other TO SUBSCRIBER INSTRUCTIONS: ZIP R E G IS T R A T IO N FOR FR B USE O N LY BY CHARGE TO OUR RESERVE ACCOUNT 1 BY CASH OR CHECK IN IMMEDIATELY AVAILABLE FUNDS □ BY SURRENDER OF MATURING SECURITIES TRANS. A C C O U N T IN G D A T E ISSUE A G E N T NO. OF PIECES DENOM. AMOUNT SERIAL NOS. (LEAVE BLANK) DATE F O R FRB USE ONLY N A M E (S ) 32 10,000 38 ID O R S.S. 5,000 34 100 ,000 42 1,000,000 99 TOTAL NO. ADDRESS Z IP TR. CASE NO. N A M E (S ) 32 ID O R S.S. 5,000 34 10,000 NO. 38 Z IP 100 ,000 4? ADDRESS 1,000,000 99 TOTAL TR. CASE NO. N A M E (S ) 32 ID O R S.S. 5,000 34 10,000 NO. 38 Z IP 1 0 0 ,000 42 ADDRESS 1,000,000 99 TOTAL TR. CASE NO. N A M E (S ) 32 ID O R S.S. NO. 5,000 34 10,000 38 Z IP 100,000 42 ADDRESS 1,000,000 99 TOTAL TR. CASE NO. N A M E (S ) 32 5,000 34 S.S. 10,000 38 ID O R 100 ,000 42 1 ,00 0 ,0 0 0 99 TOTAL NO. ADDRESS — MMW— — Z IP LOAN CODE OCTOBER 31, 1977 INTEREST COM P. IN S T R U C T IO N S 12 TR. CASE NO. 110-01