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FEDERAL RESERVE BANK O F N EW YORK Fiscal Agent of the United States [ Circular No. 8 2 5 6 1 January 11, 1978 J OFFERING OF TWO SERIES OF TREASURY BILLS $2,300,000,000 of 91-Day Bills, Additional Amount, Series Dated October 20, 1977, Due April 20, 1978 (To Be Issued January 19, 1978) $3,400,000,000 of 182-Day Bills, Dated January 19, 1978, Due July 20, 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 pubiic notice, invites tenders for two series of Treasury bills totaling approximately $5,700 million, to be issued January 19, 1978. This offering will not provide new cash tor the t reasury as the maturing bills are outstanding in the amount of $5,711 million. The two series offered are as follows: 91-day bills (to maturity date) for approximately $2,300 million, representing an additional amount of bills dated October 20, 1977, and to mature April 20, 1978 (CUS1P No. 912793 P83), originally issued in the amount of $3,403 million (an additional $3,004 million was issued on December 2, 19/7), the additional and original bills to be freely interchangeable. 182-day bills for approximately $3,400 million to be dated January 19, 1978, and to mature July 20, 1978 (C U SIP No. 912793 S31). Both series of bills will be issued for cash and in exchange for Treasury bills maturing January 19, 1978. federal Reserve Ranks, for tnemseives and as agents of foreign and international monetary authorities, presently hold $3,117 million of the maturing bills, 'these accounts may exchange bills they hold tor the bins now being ottered 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 tor derinitive bills in the $1UU,UU0 denomination, which will be available only to investors who are ahie 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 $1U,U00 and in any higher $5,U0U multiple, on the records either of the .Federal Reserve Ranks 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. 21)226, up to 1 :30 p.m., Eastern Standard time, Monday, January 16, 1978. Form PD 4632-2 (for 26-week series) or Form PD 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 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. Others are only permitted to submit tenders for their own account. 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. No deposit need accompany tenders from incorporated banks and trust companies and trom responsible and recognized dealers in investment securities for bills to be maintained on tne book-entry records ot Federal Reserve Banks and Branches, or for bills issued m 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. 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 $50U,0U0 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 January 19, 1978, in cash or other immediately available funds or in Treasury bills maturing January 19, 1978. 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 454(b) and 1221(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 No. 418 (current revi sion) and Public Debt Series—Nos. 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, January 16, 1978, 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. Payment for Treasury bills cannot be made by credit through the Treasury Tax and Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. Results'of the last weekly offering of Treasury Bills (91-day bills to be issued January 12, 1978, representing an additional amount of bills dated October 13, 1977, maturing April 13, 1978; and 182-day bills dated January 12, 1978, maturing July 13, 1978) are shown on the reverse side of this circular. P aul A. V olcker, President. (over) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED JANUARY 12, 1978) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing April 13,1978 Price H ig h ............................................... L o w ................................................ Average......................................... 98.320a 98.309 98.311 182-Day Treasury Bills Maturing July 13, 1978 Discount Rate Investment Rate 1 6.646% 6.690% 6.682% 6.85% 6.90% 6.89% Price 96.552b 96.524 96.538 1 Equivalent coupon-issue yield. a Excepting two tenders totaling $1,745,000. Discount Rate Investment Rate 1 6.820% 6.876% 6.848% 7.16% 7.22% 7.19% b Excepting one tender of $100,000. (67 percent of the amount of 91-day bills bid for at the low price was accepted.) (63 percent of the amount of 182-day bills bid for at the low price was accepted.) Total Tenders Received and Accepted 182-Day Treasury Bills Maturing July 13, 1978 91-Day Treasury Bills Maturing April 13, 1978 F.R. District (and U.S. Treasury) Boston....................................... New Y o rk ................................. Philadelphia............................. Cleveland........................ .......... Richmond................................. A tlanta...................................... Chicago...................................... St. L ouis................................... Minneapolis.............................. Kansas C ity............................. D allas........................................ San Francisco.......................... $ 34,285,000 3,386,215,000 32,580,000 91,525,000 44,440,000 48,065,000 327,510,000 45,390,000 20,625,000 48,525,000 22,630,000 313,355,000 U.S. T reasury.......................... 7,625,000 T otals ............................. $4,422,770,000 $ 32,635,000 1,750,140,000 32,580,000 66,825,000 38,790,000 48,065,000 106,510,000 25,390,000 13,975,000 42,335,000 22,630,000 113,545,000 7,625,000 $2,301,045,000c c Includes $428,850,000 noncompetitive tenders from the public. d Includes $204,120,000 noncompetitive tenders from the public. Accepted Received Accepted Received $ 45,215,000 4,144,800,000 18,695,000 38,270,000 44,430,000 19,275,000 452,055,000 44,020,000 33,415,000 41,790,000 23,145,000 450,090,000 4,480,000 $5,359,680,000 $ 38,215,000 2,535,800,000 18,695,000 38,270,000 44,430,000 19,275,000 323,355,000 36,170,000 33,415,000 41,790,000 18,145,000 248,090,000 4,480,000 $3,400,130,000'