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FEDERAL RESERVE BANK O F NEW YORK Fiscal Agent of the United States [Circular No. 8 2 2 5*1 J November 30, 1977 OFFERING OF TWO SERIES OF TREASURY BILLS $2,200,000,000 of 91-Day Bills, Additional Amount, Series Dated September 8,1977, Due March 9,1978 (To Be Issued December 8, 1977) $3,400,000,000 of 182-Day Bills, Dated December 8, 1977, Due June 8, 1978 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve D istrict: Following is the text of a notice issued by the Treasury Department, released yesterday: The Department of the Treasury, by this public notice, invites tenders for two series of Treasury bills totaling approximately $5,600 million, to be issued December 8 , 1977. This offering will provide $400 million of new cash for the Treasury as the maturing bills are outstanding in the amount of $5,211 million. The two series offered are as follow s: Payment for the full par amount of the bills applied for must accompany all tenders submitted for bills to be maintained on the book-entry records of the Department of the Treasury. A cash adjustment will be made on all accepted tenders for the difference between the par payment submitted and the actual issue price as determined in the auction. 91-day bills (to maturity date) for approximately $2,200 million, representing an additional amount of bills dated September 8 , 1977, and to mature March 9, 1978 ( C U S I P N o. 912793 P 2 6 ), originally issued in the amount of $3,203 million, the additional and original bills to be freely interchangeable. N o deposit need accompany tenders from incorporated banks and trust companies and from responsible and recognized dealers in investment securities for bills to be maintained on the book-entry records of Federal Reserve Banks and Branches, or for bills issued in bearer form, where authorized. A deposit of 2 percent of the par amount of the bills applied for must accompany tenders for such bills from others, unless an express guaranty of payment by an incorporated bank or trust company accompanies the tenders. 182-day bills for approximately $3,400 million to be dated December 8 , 1977, and to mature June 8 , 1978 (C U S I P N o. 912793 Q 7 4 ). Both series of bills will be issued for cash and in exchange for Treasury bills maturing December 8 , 1977. Federal Reserve Banks, for themselves and as agents of ioreign and international monetary authorities, presently hold $2,622 million of the maturing bills. These accounts may exchange bills they hold for the bills now being offered at the weighted average prices of accepted competi tive tenders. The bills will be issued on a discount basis under competitive and noncompetitive bidding, and at maturity their par amount will be payable without interest. Except for definitive bills in the $100,000 denomination, which will be available only to investors who are able to show that they are required by law or regulation to hold securities in physical form, both series of bills will be issued entirely in book-entry form in a minimum amount of $ 10,000 and in any higher $5,000 multiple, on the records either of the Federal Reserve Banks and Branches, or of the Department of the Treasury. Tenders will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, W ashington, D . C. 20226, up to 1 :30 p.m., Eastern Standard time, Monday, December 5, 1977. Form P D 4632-2 (for 26-week series) or Form P D 4632-3 (for 13-week series) should be used to submit tenders for bills to be maintained on the book-entry records of the Department of the T reasury. Each tender must be for a minimum of $10,000. Tenders over $10,000 must be in multiples of $5,000. In the case of competitive tenders the price offered must be expressed on the basis of 100 , with not more than three decimals, e.g., 99.925. Fractions may not be used. Banking institutions and dealers who make primary markets in Government securities and report daily to the Federal Reserve Bank of N ew Y o rk 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. Others are only permitted to submit tenders for their own account. Public announcement will be made by the Department of the Treasury of the amount and price range of accepted bids. Competi tive bidders will be advised of the acceptance or rejection of their tenders. The Secretary of the Treasury expressly reserves the right to accept or reject any or all tenders, in whole or in part, and the Secretary’s action shall be final. Subject to these reservations, noncompetitive tenders for each issue for $500,000 or less without stated price from any one bidder will be accepted in full at the weighted average price (in three decimals) of accepted competitive bids for the respective issues. Settlement for accepted tenders for bills to be maintained on the book-entry records of Federal Reserve Banks and Branches, and bills issued in bearer form must be made or completed at the Fed eral Reserve Bank or Branch or at the Bureau of the Public Debt on December 8 , 1977, in cash or other immediately available funds or in Treasury bills maturing December 8 , 1977. Cash adjustments will be made for differences between the par value of the maturing bills accepted in exchange and the issue price of the new bills. Under Sections 4 5 4 (b ) and 12 2 1 (5 ) of the Internal Revenue Code of 1954 the amount of discount at which these bills are sold is considered to accrue when the bills are sold, redeemed or other wise disposed of, and the bills are excluded from consideration as capital assets. Accordingly, the owner of these bills (other than life insurance companies) must include in his or her Federal in come tax return, as ordinary gain or loss, the difference between the price paid for the bills, whether on original issue or on sub sequent purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made. Department of the Treasury Circulars N o. 418 (current revi sion) and Public Debt Series— N os. 26-76 and 27-76, and this notice prescribe the terms of these Treasury bills and govern the conditions of their issue. Copies of the circulars and tender forms may be obtained from any Federal Reserve Bank or Branch, or from the Bureau of the Public Debt. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, December 5, 1977, at the Securities Department of its Head Office and at its Buffalo Branch. Tender forms for the respective series are enclosed. Please use the appropriate forms to submit tenders and return them in the enclosed envelope marked “ Tender for Treasury Bills.” Forms for submitting tenders directly to the Treasury are available from the Government Bond Division of this Bank. Tenders not requiring a deposit may be submitted by telegraph, subject to written confir mation; no tenders may be submitted by telephone. P a ym e n t for T reasu ry bills cannot be m ade by credit through the T reasu ry T a x and L oan A ccou nt. S ettlem en t m u st be m ade in cash or other im m ediately available funds or in m atu rin g T reasu ry bills. Results of the last weekly offering of Treasury bills (91-day bills to be issued December 1, 1977, representing an additional amount of bills dated September 1, 1977, maturing March 2, 1978; and 182-day bills dated December 1, 1977, maturing June 1, 1978) are shown on the reverse side of this circular. P a u l A . V olcker, M President. ( over) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED DECEMBER 1, 1977) Range of Accepted Competitive Bids 18 2 -D a y Treasury Bills M aturing June 1 , 19 78 9 1 -D a y Treasury Bills Maturing M arch 2 , 19 78 Price 98.484 98.467 98.469 High................................... Low.................................... Average............................... 1 Equivalent Discount Rate Investment Rate1 Price 6.17% 6.24% 6.24% 5.997% 6.065% 6.057% 96.797 a 96773 96.7 79 Discount Rate 6.336% 6.383% 6.371% Investment Rate1 6.64% 6.69% 6.67% a Excepting one tender of $150,000. coupon-issue yield. (38 percent of the amount of 182-day bills bid for at the low price was accepted.) (94 percent of the amount of 91-day bills bid for at the low price was accepted.) Total Tenders Received and Accepted 9 1 -D a y Treasury Bills M aturing M arch 2 , 19 78 F.R. District (and U S. Treasury) Boston................... New York.............. Philadelphia............ Cleveland............... Richmond............... Atlanta.................. Chicago.................. St. Louis................ Minneapolis............ Kansas City............. Dallas.................... San Francisco......... U.S. Treasury......... T o t a l s ...................... Accepted Received $ 21,355,000 3,726,055,000 31,980,000 52,145,000 25,890,000 32,505,000 247,560,000 41,165,000 16,640,000 35,660,000 34,485,000 264,600,000 $ 11,355,000 1,794,055,000 31,980,000 27,145,000 23,830,000 32,345,000 141,420,000 21,145,000 8,460,000 31,600,000 31,425,000 142,300,000 3,360,000 3,360,000 $4,533,400,000 $2,300,420,000b b Includes $317,450,000 noncompetitive tenders from the public. c Includes $142,085,000 noncompetitive tenders from the public. 18 2 -D a y Treasury Bills M aturing June 1 , 19 78 Accepted Received $ 36,075,000 5,796,745,000 36,940,000 81,540,000 24,065,000 16,515,000 409,545,000 32,675,000 24,145,000 18,905,000 13,505,000 547,000,000 $ 16,075,000 2,968,045,000 36,940,000 25,340,000 14,965,000 15,705,000 198,345,000 12,055,000 22,285,000 17,020,000 7,505,000 163,200,000 2,830,000 2,830,000 $7,040,485,000 $3,500,310,000
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