Full text of Federal Reserve Bank of New York Circulars : 8371. Treasury to Auction $3,000 Million of 2-Year Notes

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FED ER A L RESERVE BANK
OF N EW YORK
Fiscal Agent of the United States
C ircular No. 8371
I June 15,1978

TREASURY TO AUCTION $3,000 MILLION OF 2-YEAR NOTES
T o A l l B a n k in g I n s titu tio n s , a n d O th e r s C o n ce rn ed ,
in th e S e c o n d F e d e r a l R e s e r v e D is tr ic t:

The following statement was issued yesterday by the Treasury Department:
The Department of the Treasury will auction $3,000 million of 2-year notes to refund $2,537 million of
notes maturing June 30, 1978, and to raise $463 million new cash. The $2,537 million of maturing notes are
those held by the public, including $350 million currently held by Federal Reserve Banks as agents for foreign
and international monetary authorities.
In addition to the public holdings, Government accounts and Federal Reserve Banks, for their own
accounts, hold $794 million of the maturing securities that may be refunded by issuing additional amounts of
the new notes at the average price of accepted competititive tenders. Additional amounts of the new securities
may also be issued at the average price, for new cash only, to Federal Reserve Banks as agents for foreign and
international monetary authorities.
Details about the new security are given in the attached highlights of the offering and in the official offering
circular.

Printed on the reverse side is a table summarizing the highlights of the offering. Copies of the official
offering circular will be furnished upon request directed to our Government Bond Division (Tel. No.
212-791-6356).
This Bank will receive tenders up to 1:30 p.m., Eastern Daylight Saving time, Tuesday, June 20,
1978, at the Securities Department of its Head Office and at its Buffalo Branch; provided, however, that
noncompetitive tenders will be considered timely received if they are mailed to this Bank or its Branch
under a postmark no later than June 19. Enclosed is a copy of the form to be used in submitting tenders. If
there is any doubt that competitive tenders sent by mail will reach this Bank or its Branch on time, bidders
should use other means of transmitting their tenders.
Bidders submitting noncompetitive tenders should realize that it is possible that the average price may
be above par, in which case they would have to pay more than the face value for the securities.
If payment is made by check, the check should be a certified personal check or an official bank check,
payable on its face to the Federal Reserve Bank of New York; checks endorsed to this Bank will not be
accepted.
As provided in the official offering circular, “in every case where full payment is not completed on
time, the deposit submitted with the tender, up to 5 percent of the face amount of securities allotted, shall,
at the discretion of the Secretary of the Treasury, be forfeited to the United States.”
A recorded message (at the Head Office — Tel. No. 212-791-5823; at the Buffalo Branch — Tel. No.
716-849-5046) provides information about this and other Treasury offerings; additional inquiries regarding
this offering may be made by calling, at the Head Office, Tel. No. 212-791-6619, or, at the Buffalo Branch,
Tel. No. 716-849-5016. (If the inquiry relates to competitive tenders, however, the Head Office number to
call is 212-791-5465.)
PAUL A. VOLCKER,

President.
(Over)

HIGHLIGHTS OF TREASURY
OFFERING TO THE PUBLIC
OF 2- YEAR NOTES
TO BE ISSUED JUNE 30,1978
Amount Offered:
To the public

$3,000 million

Description of Security:
Term and type of security.....

2-year notes

Series and CUSIP designation ...

Series Q-1980
(CUSIP No. 912827 HV7)

Maturity date.............

June 30, 1980

Call date ................

No provision

Interest coupon rate.........

To be determined, based on the
average of accepted bids

Investment yield...........

To be determined at auction

Premium or discount........

To be determined after auction

Interest payment dates.......

December 31 and June 30

Minimum denomination available

$5,000

Terms of Sale:
Method of sale ...................

Yield auction

Accrued interest payable by investor.....

None

Preferred allotment ................

Noncompetitive bid for $1,000,000
or less

Deposit requirement................

5% of face amount

Deposit guarantee by designated institutions

Acceptable

Key Dates:
Deadline for receipt of tenders................................Tuesday, June 20, 1978
by 1:30 p.m., EDST
Settlement date (final payment due)
a) Cash or Federal funds.................................... Friday, June 30, 1978
b) Check drawn on bank within FRB district where submitted......... Wednesday, June 28, 1978
c) Check drawn on bank outside FRB district where submitted........ Monday, June 26, 1978
Delivery date for coupon securities............................. Friday, June 30,1978

UNITED STATES OF AMERICA
TREASURY NOTES OF JUNE 30, 1980
SERIES Q-1980

DEPARTMENT CIRCULAR
Public Debt Series - No.

DEPARTMENT OF THE TREASURY,
OFFICE OF THE SECRETARY,
Washington, June 15, 1978.

14-78

INVITATION

FOR TENDERS

The Secretary of the Treasury,

under the authority

of the Second Liberty Bond Act, as amended,

invites tenders for

approximately $3,000,000,000 of United States securities,
designated Treasury Notes of June 30, 1980,
No. 912627 HV 7).

Series Q-1980

(CUSIP

The securities will be sold at auction with

bidding 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 below.

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.

amounts may also be issued

Additional

for cash to Federal Reserve Banks as

agents of foreign and international monetary authorities.
2.
2.
bear

DESCRIPTION OF SECURITIES

The securities will be dated June 30, 1978, and will

interest from that date, payable on a semiannual basis on

December 31, 1978,

and each subsequent 6 months on June 30 and

December 31, until the principal becomes payable.
mature June 30,

1980,

They will

and will not be subject to call for

redemption prior to maturity.
2.

The

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, whether 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 local taxing authority.

-2-

The securities will be acceptable to secure deposits

of public monies.

They will not be acceptable in payment of

taxes.
2.

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,
$1,000,000.

and

Book-entry securities will be available to eligible

bidders in multiples of those amounts.

Interchanges of

securities of different denominations and of coupon, registered
and book-entry securities, and the transfer of registered
securities will be permitted.
2.

The Department of the Treasury's general

regulations governing United States securities apply to the
securities offered in this circular.

These general regulations

include those currently in effect, as well as those that may be
issued at a later date.
3.
3.

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, June 20, 1973.

Noncompetitive tenders as defined below

will be considered timely if postmarked no later than Monday,
June 19, 1978.
3.
bid for.

Each tender must state the face amount of securities

The minimum bid is $5,000 and larger bids must be in

multiples of that amount.

Competitive tenders must also show the

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 show the term "noncompetitive" on the
tender form in lieu of a specified yield.

No bidder may submit

more than one noncompetitive tender and the amount may not exceed
$ 1 , 000 , 000 .

All bidders must certify that they have not made and

will not make any agreements for the sale or purchase of any
securities of this issue prior to the deadline established in
Section 3.1.

for receipt of tenders.

Those authorized to submit

tenders for the account of customers will be required to certify

-3 that such tenders are submitted under the same conditions, agree
ments,

and certifications as tenders submitted directly by

bidders for their own account.
3.

Commercial banks, which for this purpose are defined
*

as banks accepting demand deposits, and primary dealers, which
for this purpose are defined as 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.
3.

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 puolic
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 be 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 checks), or by a guarantee of
such deposit by a commercial bank or a primary dealer.
3.
opened,

Immediately after the closing hour, tenders will be

followed by a public announcement of the amount and yield

range of accepted bids.

Subject to the reservations expressed

Section 4, noncompetitive tenders will be accepted
then competitive tenders will be accepted,
the lowest yields,

in full, and

starting with those at

through successively higher yields 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, which results

in an equivalent average accepted price

close to 100.000 and a lowest accepted price above the original
issue discount limit of 99.500.

That rate of interest will be

-4 paid on all of the securities.

Based on such interest rate, the

price on each competitive tender allotted will be determined and
each successful competitive bidder will be required to pay the
price equivalent to the yield bid.

Those submitting

noncompetitive tenders will pay the price equivalent to the
weighted average yield of accepted competitive tenders.

Price

calculations will be carried to three decimal places on the basis
of price per hundred, e.g., 99.923,

and the determinations of the

Secretary of the Treasury shall be final.

If the amount of

noncompetitive tenders received would absorb 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 price equivalent to the weighted average yield
of accepted competitive tenders.
3.

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.
4.

RESERVATIONS

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 than the amount of securities specified

Section 1, and to make different percentage allotments to various
classes of applicants when the Secretary considers it in the
public interest.

The Secretary's action under this Section is

f inal.
5.
5.

PAYMENT AND DELIVERY

Settlement for allotted securities must be made or

completed on or before Friday, June 30, 1978, at the Federal
Reserve Bank or Branch or at the Bureau of the Public Debt,
wherever the tender was submitted.
other funds
bills,

Payment must be in cash;

immediately available to the Treasury;

in Treasury

notes or bonds (with all coupons detached) maturing on or

before the settlement date but which are not overdue as defined
in the general regulations governing United States securities; or

by check drawn to the order of the institution to which the

-5-

tender was submitted, which must be received at such institution no
later than:
(a) "Wednesday, June 28, 1978 , if the check is drawn on a
bank in the Federal Reserve District of the institution
to which the check is submitted

(the Fifth Federal

Reserve District in case of the Bureau of the Public
De bt) , or
(b) Monday, June 26, 1978,

if the check is drawn on a

bank in another Federal Reserve District.
Checks received after the dates set forth 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 the
appropriate identifying number as required on tax returns and
other documents submitted to the 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 bidder for any
difference between the face amount of securities presented and
the amount payable on the securities allotted.
5.
on time,

In every case where full payment is not completed

the deposit submitted with the tender, up to 5 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.

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 the registrations or assignments of the
securities surrendered.
registered

When the new securities are to be

in names and forms different from those in the

inscriptions or assignments of the securities presented,

the

assignment should be to "The Secretary of the Treasury for
(securities offered by this circular)
taxpayer identifying number)."

in the name of (name and

If new securities in coupon form

are desired, the assignment should be to "The Secretary of the
Treasury for coupon (securities offered by this circular) to be

-6-

delivered to (name and address)."

Specific instructions for the

issuance and delivery of the new securities, signed by the owner
or authorized representative, must accompany the securities
presented.

Securities tendered in payment should be surrendered

to the Federal Reserve Bank or Branch or to the Bureau of the
Public Debt, Washington,

D. C. 20226.

The securities must be

delivered at the expense and risk of the holder.
5.

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 shall 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 the risk and expense of the holder.
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 have been inscribed.
6.
6.

GENERAL PROVISIONS

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 the Treasury,
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.

The Secretary of the Treasury may at any time issue

supplemental or amendatory rules and regulations governing the
offering.

Public announcement of such changes will be promptly

prov ided.

Paul H. Taylor,
Acting Fiscal Assistant Secretary.

Form NA

IMPORTANT — Closing time for receipt of this tender is 1:30 p.m., Tuesday, June 20, 1978

TENDER FOR TREASURY NOTES OF SERIES Q-1980
Due June 30, 1980

PRIVACY ACT STATEMENT — The individually identifiable inform ation required on this form is necessary to permit the subscription to be processed and the securities to be issued. If registered securities
are requested, the regulations governing United States securities (D epartm ent Circular No. 300) and the offering circular require submission of social security num bers; the num bers and other information are used
in inscribing the securities and establishing and servicing the ownership and interest records. The transaction will not be completed unless all required d ata is furnished.

Dated June 30, 1978

Dated at

FEDERAL RESERVE BANK OF NEW YORK,
Fiscal Agent of the United States,
New York, N.Y. 10045

The undersigned hereby offers to purchase the above-described securities 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.
D o n o t f i l l in b o th C o m p e titiv e a n d
N o n c o m p e titiv e te n d e r s on o n e f o r m

COMPETITIVE TENDER

$ ........................ (maturity value)
or any lesser amount that may be awarded.
Yield:...

NONCOMPETITIVE TENDER

$ ........................ (maturity value)
(N o t to e x c e e d $ 1 ,0 0 0 ,0 0 0 f o r o n e b id d e r th ro u g h a ll so u r c e s )

at the average price of accepted competitive bids.

( Y ie ld m u s t b e e x p r e s s e d w ith n o t m o re th a n tw o
d e c im a l p la c e s , f o r e x a m p le , 7.11)

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 )

Pieces

Denom ination

XXX

xxxxxx
$

M aturity value
XXX

XXX

5,000
10,000

XXX

□ Deliver over the counter to the
undersigned (1)
□ Ship to the undersigned (2)
□ Hold in safekeeping (for m em ber
bank only) in —
□ Investment Account (4)
□ General Account (5)
□ T rust Account (6)

Payment will be made as follows:
H By charge to our reserve account (D)
H By cash or check in im m e d ia te ly
a v a ila b le f u n d s (F)
~] By surrender of m aturing securities (E)
Q By charge to my correspondent
b a n k .......................................................(D)

____________ (Name of bank)_______
□ Special instructions (3)

□ Hold as collateral for Treasury Tax and
Loan Account* (7)

100,000
1,000,000

□ Wire to

Totals

...............................................(8)

(Exact Receiving Bank Wire Address/Account)
* 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 p art of this tender.)

W E HERE B Y 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 the closing time for receipt of this tender.
W E F U RTHER CERTIFY that we have received tenders from customers in the amounts set forth opposite their
names on the listwhich ismade a part ofthis 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.
W E F U R T H E R CERTIFY that tenders received by us, ifany, 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 certificationsset forth inthisform.
(Name of subscriber — please print or type)

Insert this tender in
special envelope marked
‘‘Tenderfor Treasury
Notes or Bonds”

(Address — incl. City and State)

(Tel. No.)

(Signature of subscriber or authorized signature)

(Title of authorized signer)

(Institutions subm itting tenders for custom er account m ust list custom ers’ names on lines below or on an attached rider)

(Name of customer)

INSTRUCTIONS:
1.

No tender for less than $5,000 will be considered; and each tender m ust be for a m ultiple of $5,000 (m aturity value).

2. Only banking institutions, and dealers who make prim ary m arkets in G overnm ent securities and report daily to this Bank their
positions with respect to Governm ent securities and borrowings thereon, may subm it tenders for custom er account; in doing so, they may
consolidate competitive tenders a t th e s a m e y ie ld and may consolidate noncompetitive tenders, provided a list is attached showing the name
of each bidder and the am ount bid for his account. O thers will not be perm itted to subm it tenders except for their own account.
3. Tenders will be received without deposit from commercial and other banks for their own account, tederally-insured savings and
loan associations. States, political subdivisions or instrum entalities thereof, public pension and retirem ent and other public funds,
international organizations in which the United States holds m em bership, foreign central banks and foreign States, dealers who make
primary m arkets in Governm ent securities and report daily to the Federal Reserve Bank of New York their positions with respect to
Governm ent securities and borrowings thereon, and G overnm ent accounts. Tenders from others m ust be accom panied by paym ent of 5
percent of the face am ount of the securities applied for.
4. Paym ent m ust be completed by June 30, 1978. If paym ent is by check drawn on a bank in this District, it m ust be received by
June 28, 1978; checks draw n on a bank in another District m ust be received by June 26, 1978. All checks m ust 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 m aterial, the tender
m ay be disregarded.

[Enc. Cir. No. 8371]

(OVER)

SUBSCRIPTION NO

SCHEDULE FOR ISSUE OF REGISTERED TREASURY NOTES OF SERIES Q-1980
D E L IV E R Y IN S T R U C T IO N S

P A Y M E N T IN S T R U C T IO N S

S U B S C R IB E R

□

DELIVER OVER THE COUNTER

□

S IG N A T U R E _

□

s h ip

A D D R E S S ____

□

OTHER INSTRUCTIONS:

TO SUBSCRIBER

Z IP

R E G IS T R A T IO N

NO. OF
PIECES

IN S T R U C T IO N S

DENOM.

AMOUNT

SERIAL NOS.
(LEAVE BLANK)

□

FOR FRB

BY CHARGE TO OUR
RESERVE ACCOUNT
BY CASH OR CHECK IN

TRANS. A C C O U N T IN G D A T E

IMMEDIATELY AVAILABLE FUNDS
□

BY SURRENDER OF
MATURING SECURITIES
□ I BY CHARGE TO MY
CORRESPONDENT BANK
FOR

FRB

USE ONLY

ISSUE A G E N T 12
JUNE

3 0 , 1978

INTEREST C O M P.

DATE

USE O N LY

N A M E (S )

ID O R S.S.

5,000

10,000

NO.

ADDRESS
Z IP

1 0 0 ,0 00

1 ,0 0 0 , 0 0 0

TOTAL

T R. C A S E NO.

NA M E (S )
32

ID O R S.S.

5,000

10 ,0 0 0

1 0 0 ,0 0 0

1,000,000

TOTAL

NO.

ADDRESS
Z IP

T R. C A S E NO.

N A M E (S )

ID O R S.S.

5,000

10,000

NO.

ADDRESS

Z IP

100,000

1,000,000

TOTAL

T R . C A S E NO.

N A M E (S )

ID O R S.S.

NO.

ADDRESS
Z IP

5,000

10,000

1 0 0 ,0 0 0

1,000,000

TOTAL

TR. C A S E NO.

N A M E(S)
32

ID O R S.S.

5,000

10,000

100,000

1,000,000

TOTAL

NO.

ADDRESS

Z IP

TR. C A S E NO.

LOAN CODE

1 1 0 -0 1

Full text of Federal Reserve Bank of New York Circulars : 8371. Treasury to Auction $3,000 Million of 2-Year Notes

FRASER