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FE D E R A L R ESER VE B ANK O F N E W YORK Fiscal Agent of the United States No. 83741 [ Circular June 21, 1978 J OFFERING OF TWO SERIES OF TREASURY BILLS $2,300,000,000 of 91-Day Bills, Additional Amount, Series Dated March 30, 1978, Due September 28, 1978 (To Be Issued June 29, 1978) $3,400,000,000 of 182-Day Bills, Dated June 29, 1978, Due December 28, 1978 T o A l l I n c o r p o r a te d B a n k s a n d T r u s t C o m p a n ie s , a n d O th e r s C o n c e r n e d , in th e S e c o n d F e d e r a l R e s e r v e D i s t r i c t : Following is the text of a notice issued by the Treasury Department, released yesterday: T he D ep artm en t of the T re a su ry , by this public notice, invites tenders fo r tw o series of T re a su ry bills to ta lin g a pproxim ately $5,700 m illion, to be issued Ju n e 29, 1978. T h is o ffering will not provide new cash fo r the T re a su ry as the m atu rin g bills are o u t standing in the am ount of $5,692 m illion. T h e tw o series offered are as fo llo w s: 91-day bills (to m atu rity d a te ) fo r a p proxim ately $2,300 m illion, re p re se n tin g an additional am ount of bills dated M a rch 30, 1978, and to m atu re Septem ber 28, 1978 ( C U S I P N o. 912793 T 5 5 ), originally issued in the am ount of $3,403 m illion, the additional and original bills to be freely interchangeable. 182-day bills fo r a p proxim ately $3,400 m illion to be dated Ju n e 29, 1978, and to m atu re D ecem ber 28, 1978 ( C U S I P No. 912793 V 2 9 ). B oth series of bills will be issued fo r cash and in exchange for T re a su ry bills m atu rin g Ju n e 29, 1978. F ed eral R eserve B anks, for them selves and as agents of foreign and intern atio n al m onetary au th o rities, p resently hold $2,785 m illion of the m atu rin g bills. T hese accounts m ay exchange bills they hold for the bills now being offered a t the w eighted average prices of accepted com peti tive tenders. T he bills will be issued on a discount basis under com petitive and noncom petitive bidding, and a t m atu rity th eir p a r am ount w ill be payable w ithout interest. E x ce p t fo r definitive bills in the $100,000 denom ination, w hich w ill be available only to investors who a re able to show th a t they are required by law o r reg u latio n to hold securities in physical form , both series of bills w ill be issued e n tirely in boo k -en try form in a m inim um am ount of $10,000 and in any hig h er $5,000 m ultiple, on the reco rd s e ith e r of the F ed eral R eserve B anks and B ranches, o r of the D ep artm en t of the T rea su ry . T en d ers w ill be received a t F ed eral R eserve B anks and B ranches and a t the B ureau of the Public Debt. W ashington, D. C. 20226, up to 1 :30 p.m., E a s te rn D a y lig h t S av in g tim e, M onday, Ju n e 26, 1978. F o rm P D 4632-2 (fo r 26-w eek series) o r F o rm P D 4632-3 (fo r 13-week series) should be used to subm it tenders for bills to be m aintained on the b o ok-entry records of the D ep artm en t of the T re a su ry . E ach tender m ust be fo r a m inim um of $10,000. T en d ers over $10,000 m ust be in m ultiples of $5,000. In the case of com petitive tenders the price offered m ust be expressed on the basis of 100, w ith not m ore th an th ree decim als, e.g., 99.925. F ra c tio n s m ay not be used. B an k in g institutions and dealers w ho m ake p rim a ry m ark e ts in G overnm ent securities and re p o rt daily to the F e d e ral R eserve B ank of N ew Y o rk th eir positions in and bo rro w in g s on such securities m ay subm it tenders fo r account of custom ers, if the nam es of the custom ers and the am ount fo r each custom er are furnished. O th e rs a re only perm itted to subm it tenders fo r th eir own account. P ay m en t fo r the full p a r am ount of the bills applied fo r m ust accom pany all tenders subm itted for bills to be m aintained on the book-entry records of the D ep artm en t of the T rea su ry . A cash ad ju stm en t will be m ade on all accepted tenders for the difference betw een the p a r paym ent subm itted and the actual issue price as determ ined in the auction. N o deposit need accom pany tenders from incorporated banks and tru s t com panies and from responsible and recognized dealers in investm ent securities fo r bills to be m aintained on the book-entry records of F ed eral R eserve B anks and B ranches, or for bills issued in b e are r form , w here authorized. A deposit of 2 percent of the par am ount of the bills applied fo r m ust accom pany tenders for such bills from others, unless an ex p ress g u a ran ty of paym ent by an incorporated bank o r tru s t com pany accom panies the tenders. P ublic announcem ent w ill be m ade by the D ep artm en t of the T re a su ry of the am ount and price range of accepted bids. Com peti tive bidders will be advised of the acceptance o r rejectio n of their tenders. T he S e c retary of the T re a su ry ex p ressly reserves the rig h t to accept o r re je c t any o r all tenders, in w hole o r in part, and the S e c re ta ry ’s action shall be final. S ub ject to these reservations, noncom petitive tenders fo r each issue for $500,000 o r less w ithout stated price from any one bidder will be accepted in full a t the w eighted average price (in th ree decim als) of accepted com petitive bids for the respective issues. S ettlem ent for accepted tenders fo r bills to be m aintained on the book-entry records of F e d e ral R eserve B anks and B ranches, and bills issued in b e are r form m ust be m ade o r com pleted a t the F e d eral R eserve B ank o r B ran ch o r a t the B ureau of the Public D ebt on June 29, 1978, in cash o r o th er im m ediately available funds o r in T re a su ry bills m atu rin g June 29, 1978. C ash ad ju stm en ts will be m ade fo r differences betw een the p a r value of the m atu rin g bills accepted in exchange and the issue price of the new bills. U nder Sections 4 5 4 (b ) and 1221(5) of the In tern a l Revenue Code of 1954 the am ount of discount a t w hich these bills a re sold is considered to accrue w hen the bills a re sold, redeem ed o r o th e r wise disposed of, and the bills are excluded from consideration as capital assets. A ccordingly, the ow ner of these bills (o th e r than life insurance com panies) m ust include in his o r her F e d e ral in come ta x re tu rn , as o rd in ary gain o r loss, the difference betw een the price paid for the bills, w h eth er on original issue o r on sub sequent purchase, and the am ount actually received e ith e r upon sale o r redem ption a t m atu rity d u rin g the taxable y e ar for w hich the re tu rn is made. D ep artm en t of the T re a su ry C irculars No. 418 (c u rre n t rev i sion) and Public D ebt Series— N os. 26-76 and 27-76, and this notice, prescribe the term s of these T re a su ry bills and govern the conditions of their issue. Copies of the circ u la rs and ten d er form s m ay be obtained from any F ed eral R eserve B ank o r B ranch, or from the B ureau of the P ublic Debt. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Monday, June 26, 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 the Bank. 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 Treas ury 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 June 22, 1978, representing an additional amount of bills dated March 23, 1978, maturing September 21, 1978; and 182-day bills dated June 22, 1978, maturing December 21, 1978) are shown on the reverse side of this circular. P aul A. V olcker, President. ( o v er) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED JUNE 22, 1978) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing September 21,1978 High ............................ ............... Low ............................ ............ ......... Average ...................... 182-Day Treasury Bills Maturing December 21,1978 P r ic e D isc o u n t R a te I n v e s tm e n t R a te 1 P r ic e 98.318 98.312 98.315 6.654% 6.678% 6.666% 6.86% 6.89% 6.87% 96.351 96.342 96.346 D isc o u n t R a te 7.218% 7.236% 7.228% Investm ent R a te 1 7.60% 7.61% 7.61% 1 E q u iv a len t coupon-issue yield. (86 percent of the amount of 182-day bills bid for at the low price was accepted.) (22 percent of the amount of 91-day bills bid for at the low price was accepted.) Total Tenders Received and Accepted 91-Day Treasury Bills Maturing September 21,1978 F .R . D i s t r i c t (a n d Boston........................................ New Y o rk .................................. Philadelphia ............................. Cleveland .................................. Richm ond.................................. Atlanta ...................................... Chicago...................................... St. L ouis.................................... Minneapolis .............................. Kansas City .............................. Dallas ........................................ San Francisco ......................... $ 16,190,000 3,534,455,000 17,410,000 40,280,000 29,705,000 22,065,000 231,140,000 30,705,000 11,130,000 20,710,000 15,620,000 335,575,000 U.S. Treasury ......................... 6,620,000 T otals ................................... $4,311,605,000 $ 16,190,000 1,968,900,000 17,410,000 27,220,000 21,780,000 20,090,000 38,840,000 17,005,000 5,130,000 18,640,000 15,620,000 26,625,000 6,620,000 $2,200,070,000 a a Includes $314,245,000 noncom petitive tenders from the public. b Includes $179,640,000 noncom petitive tenders from the public. R e c e iv e d A c c e p te d R e c e iv e d U S . T reasu ry) 182-Day Treasury Bills Maturing December 21,1978 $ 50,005,000 4,761,210,000 5,945,000 41,540,000 12,835,000 51,480,000 229,540,000 25,880,000 12,070,000 22,635,000 6,215,000 242,100,000 4,640,000 $5,466,095,000 A c c e p te d $ 25,005,000 3,187,300,000 5,445,000 26,540,000 8,695,000 18,930,000 28,300,000 12,880,000 5,070,000 20,735,000 6,215,000 50,610,000 4,640,000 $3,400,365,000 b