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FED ER AL RESERVE BANK O F NEW YORK Fiscal Agent of the United States [ OFFERING OF TWO SERIES OF TREASURY BILLS Circular No. 8 2 3 1 "1 December 7, 1977 J $2,300,000,000 of 91-Day Bills, Additional Amount, Series Dated September 15, 1977, Due March 16, 1978 (To Be Issued December 15, 1977) $3,400,000,000 of 182-Day Bills, Dated December 15, 1977, Due June 15, 1978 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: 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 $5,700 million, to be issued December 15, 1977. This offering will provide $200 million of new cash for the Treasury as the maturing bills are outstanding in the amount o f $5,516 million. The two series offered are as fo llow 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 $2,300 million, representing an additional amount of bills dated September 15, 1977, and to mature M arch 16, 1978 ( C U S I P N o . 912793 P 3 4 ), originally issued in the amount of $3,377 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 15, 1977, and to mature June 15, 1978 (C U S I P N o . 912793 Q 8 2 ). Both series of bills will be issued for cash and in exchange for Treasury bills maturing December 15, 1977. Federal Reserve Banks, for ttiemseives and as agents of foreign and international monetary authorities, presently hold $2,855 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, Washington, D . C. 20226, up to 1 :30 p.m., Eastern Standard time, Monday, December 12, 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 Treasury. 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 ork 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 15, 1977, in cash or other immediately available funds or in Treasury bills maturing December 15, 1977. Cash adjustments will be made for differences between the par value oi 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 12, 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 en 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 n t. S ettlem en t m ust be m ade in cash or other im m ediately available funds or in m atu ring T rea su ry bills. Results of the last weekly offering of Treasury bills (91-day bills to be issued December 8, 1977, representing an additional amount of bills dated September 8, 1977, maturing March 9, 1978; and 182-day bills dated December 8, 1977, maturing June 8, 1978) are shown on the reverse side of this circular. [50] P a u l A . V olcker, President. ( over) RESULTS O F LA ST W E E K L Y OFFERING OF T R E A SU R Y BILLS (T W O SERIES TO BE ISSUED DECEM BER 8, 1977) Range of Accepted Competitive Bids 9 1 -D a y T r e a s u r y B ills M a tu r in g M a r c h 9 ,1 9 7 8 P r ic e High........................................... Low........................................... Average...................................... 98.475 a 98.470 98.471 182 -D a y T r e a s u r y B ills M a tu r in g J u n e 8 , 1978 D is c o u n t I n v e s tm e n t R a te R a t e 1 6.033% 6.053% 6.049% D is c o u n t P r ic e 6.21% 6.23% 6.23% 96.797 96.786 96.791 I n v e s tm e n t R a te R a t e 1 6.336% 6.357% 6.347% 6.64% 6.66% 6.65% 1 Equivalent coupon-issue yield. a Excepting one tender of $300,000. (13 percent of the amount of 182-day bills bid for at the low price was accepted.) (31 percent of the amount of 91-day bills bid for at the low price was accepted.) Total Tenders Received and Accepted 182 -D a y T r e a su r y B ills M a tu r in g J u n e 8 ,1 9 7 8 9 1 -D a y T r e a s u r y B ills M a tu r in g M a r c h 9 ,1 9 7 8 F .R . D is tr ic t (a n d U S . T r e a s u r y ) 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 .................................. A ccep ted R eceived $ 29,920,000 3,439,855,000 27,205,000 59,175,000 31,365,000 32,245,000 238,200,000 45,155,000 25,450,000 23,780,000 32,895,000 443,520,000 $ 20,780,000 1,700,755,000 26,515,000 32,175,000 16,160,000 26,350,000 89,225,000 22,955,000 12,380,000 18,530,000 23,065,000 208,875,000 4,795,000 4,795,000 $4,433,560,000 $2,202,560,000 b b Includes $334,595,000 noncompetitive tenders from the public. C Includes $160,650,000 noncompetitive tenders from the public. R eceived A ccepted 19,670,000 5,914,770,000 27,515,000 47,005,000 33,640,000 24,405,000 312,515,000 42,530,000 31,295,000 17,720,000 6,895,000 641,440,000 $ 4,670,000 3,002,815,000 7,015,000 16,655,000 19,640,000 15,045,000 130,515,000 13,140,000 14,295,000 16,720,000 6,895,000 151,090,000 3,255,000 3,255,000 $7,122,655,000 $3,401,750,000 $