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FED ER AL RESERVE BANK O F N EW YORK Fiscal Agent of the United States [ Circular No. 8 2 7 6 1 February 14, 1978 J OFFERING OF TWO SERIES OF TREASURY BILLS $2,400,000,000 of 91-Day Bills, Additional Amount, Series Dated November 25,1977, Due May 25, 1978 (To Be Issued February 23, 1978) $3,500,000,000 of 182-Day Bills, Dated February 23, 1978, Due August 24, 1978 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Printed below is the text of a notice issued by the T reasury Department on Friday, February 10, regarding the Treasury’s weekly offering of 91-day and 182-day bills to be issued February 23, 1978. Tender forms for the two series were mailed to you with this Bank’s Circular No. 8275, dated February 10, 1978, which contained the high lights of the offering. The Department of the Treasury, by this public notice, invites tenders for two series of Treasury bills totaling approximately $5,900 million, to be issued February 23, 1978. This offering will provide $200 million of new cash for the Treasury as the maturing bills are outstanding in the amount of $5,706 million. The two series offered are as follows : 91-day bills (to maturity date) for approximately $2,400 million, representing an additional amount of bills dated November 25, 1977, and to mature May 25, 1978 (C U SIP No. 912793 U58), originally issued in the amount of $3,503 million, the additional and original bills to be freely interchangeable. 182-day bills for approximately $3,500 million to be dated February 23, 1978, and to mature August 24, 1978 (C U S IP No. 912793 S80). Both series of bills will be issued for cash and in exchange for Treasury bills maturing February 23, 1978. Federal Reserve Banks, for themselves and as agems ot toreign and international monetary authorities, presently hold $3,048 million of the maturing bills. These accounts may exchange bills they hold for the bills now being offered at the weighted average prices oi accepted competiive 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, Friday, February 17, 1978. Form PD 4632-2 (for 26-week series) or fform 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 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 New York their positions in and borrowings on guch 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 Dook-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 irom responsible and recognized dealers m investment securities for bills to be maintained on the book-entry records ot 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. 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 February 23, 1978, in cash or other immediately available funds or in Treasury bills maturing February 23, 1978. Cash adjustments will be maue :or cntterences Detween tne par value ot 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, Friday, February 17, 1978, at the Securities Department of its Head Office and at its Buffalo Branch. Tenders not requiring a deposit may be submitted by telegraph, subject to written confirmation; 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 offering of 91-day and 182-day Treasury bills to be issued February 9, 1978 (Circular No. 8266, ated February 1, 1978) are shown on the reverse side of this circular. Results of the offering of 91-day and 182-day bills to be issued February 16, 1978 (Circular No. 8269, dated February 6, 1978) are being printed in a separate circular. P aul A. V olcker, President. Closing date for receipt of tenders is F rid a y , F e b ru a ry 1 7 . ( ovek) RESULTS OF WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED FEBRUARY 9, 1978) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing May 11, 1978 H ig h ............................................... L ow ................................................ Average.......................................... 182-Day Treasury Bills Maturing August 10, 1978 Price Discount Rate Investment Rate 1 98.372 98.363 98.363 6.440% 6.476% 6.476% 6.64% 6.68% Price 96.597a 96.588 96.591 6 .6 8 % Discount Rate Investment Rate 1 6.731% 6.749% 6.743% 7.07% 7.08% 7.08% 1 Equivalent coupon-issue yield. a Excepting two tenders totaling $845,000. (24 percent of the amount of 182-day bills bid for at the low price was accepted.) (91 percent of the amount of 91-day bills bid for at the low price was accepted.) Total Tenders Received and Accepted 182-Day Treasury Bills Maturing August 10, 1978 91-Day Treasury Bills Maturing May 11, 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 .............................. Dallas........................................ San Francisco.......................... U.S. T reasury......................... T o ta ls .......................................... $ 28,210,000 3,967,180,000 26,815,000 59,360,000 34,960,000 40,170,000 309,795,000 50,190.000 22,645,000 36,350,000 20,315,000 228,550,000 $ 23,160,000 1,943,515,000 26,815,000 36,850,000 24,825,000 33,670,000 92,615,000 22,190,000 5,645,000 26,920,000 15,725,000 47,900,000 7,730,000 7,730,000 $4,832,270,000 $2,307,560,000b b Includes $397,260,000 noncompetitive tenders from the public. c Includes $182,970,000 noncompetitive tenders from the public. Accepted Received Accepted Received $ 85,960,000 5,409,955,000 20,690,000 112,530,000 71,000,000 26,105,000 376,205,000 47,425,000 32,980,000 26,565,000 21,550,000 367,880,000 $ 20,960,000 3,195,640,000 9,985,000 12,530,000 17,500,000 19,255,000 73,205,000 19,655,000 9,980,000 24,065,000 14,230,000 81,280,000 4,430,000 4,430,000 $6,603,275,000 $3,502,715,000°