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FED ER AL RESERVE BANK O F NEW YORK Fiscal Agent of the United States Circular No. 8525 February 23, 1979 Offering of $3,320,000,000 of 364-Day Treasury Bills Due March 4,1980 Dated March 6,1979 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 rust C o m p a n ie s , a n d O th ers C o n c e r n e d , in th e S e c o n d F e d era l R e s e r v e D istr ic t: Following is the text of a notice issued yesterday by the Treasury Department: The Department o f the Treasury, by this public notice, invites tenders for approximately $3,320 million o f 364-day Treasury bills to be dated March 6, 1979, and to mature March 4, 1980 (CUS1P No. 912793 3E4). This issue will not provide new cash for the Treasury as the maturing issue is outstanding in the amount o f $3,321 million. The bills will be issued for cash and in exchange for Treasury bills maturing March 6, 1979. The public holds $1,471 million o f the maturing issue and $1,850 million is held by Federal Reserve Banks for themselves and as agents o f foreign and international monetary authorities. Tenders from Federal Reserve Banks for themselves and as agents o f foreign and international monetary authorities will be accepted at the weighted average price o f accepted competitive tenders. Additional amounts o f the bills may be issued to Federal Reserve Banks as agents o f foreign and in ternational monetary authorities, to the extent that the aggregate amount o f tenders for such accounts exceeds the aggregate amount o f maturing bills held by them. The bills will be issued on a discount basis under competitive and non competitive bidding, and at maturity their par amount will be payable without interest. This series o f bills will be issued entirely in book-entry form in a minimum amount o f $10,000 and in any higher $5,000 multiple, on the records either o f the Federal Reserve Banks and Branches, or o f the Department o f the Treasury. Tenders will be received at Federal Reserve Banks and Branches and at the Bureau o f the Public Debt, Washington, D.C. 20226, up to 1:30 p.m ., Eastern Standard time, Wednesday, February 28, 1979. Form PD 4632-1 should be used to submit tenders for bills to be maintained on the bookentry records o f the Department o f the Treasury. Each tender must be for a minimum o f $10,000. Tenders over $10,000 must be in multiples o f $5,000. In the case o f competitive tenders, the price offered must be expressed on the basis o f 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 o f New York their positions in and borrowings on such securities may sub mit tenders for account o f customers, if the names o f 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 o f the bills applied for must accom pany all tenders submitted for bills to be maintained on the book-entry records o f the Department o f 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 from responsible and recognized dealers in invest ment securities for bills to be maintained on the book-entry records o f Federal Reserve Banks and Branches. A deposit o f 2 percent o f the par amount o f the bills applied for must accompany tenders for such bills from others, unless an express guaranty o f payment by an incorporated bank or trust company accompanies the tenders. Public accouncement will be made by the Department o f the Treasury o f the amount and price range o f accepted bids. Competitive bidders will be advised o f the acceptance or rejection o f their tenders. The Secretary o f 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. Sub ject to these reservations, noncompetitive tenders 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) o f accepted competitive bids. Settlement for accepted tenders for bills to be maintained on the bookentry records o f Federal Reserve Banks and Branches must be made or completed at the Federal Reserve Bank or Branch on March 6, 1979, in cash or other immediately available funds or in Treasury bills maturing March 6, 1979. Cash adjustments will be made for differences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. Under Sections 454(b) and 1221(5) o f the Internal Revenue Code o f 1954 the amount o f discount at which these bills are sold is considered to accrue when the bills are sold, redeemed or otherwise disposed o f, and the bills are excluded from consideration as capital assets. Accordingly, the owner o f these bills (other than life insurance companies) must include in his or her Federal income tax return, as ordinary gain or loss, the dif ference between the price paid for the bills, whether on original issue or on subsequent purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made. Department o f the Treasury Circulars, Public Debt Series— Nos. 26-76 and 27-76, and this notice, prescribe the terms o f these Treasury bills and govern the conditions o f their issue. Copies o f the circulars and tender forms may be obtained from any Federal Reserve Bank or Branch, or from the Bureau o f the Public Debt. Tenders will be received up to 1:30 p .m ., Eastern Standard time, W ednesday, February 28, 1979, at the Securities Department o f this B ank ’ s Head O f fic e , at our B u ffa lo Branch , or at the Bureau o f the Public Debt. The enclosed fo rm should be used fo r submitting tenders through a financial institution. Forms fo r submitting tenders directly to the Treasury are available fro m the Treasury and A gen cy Issues Division o f this Bank. Tenders not requiring a deposit may be submitted by telegraph, subject to written co n firm a tion ; no tenders may be submitted by telephone. P a y m e n t f o r th e Treasu ry hills ca n n ot b e m a d e b y credit th rou gh th e T reasu ry Tax a n d L o a n A c c o u n t. S ettlem en t m u st b e m a d e in cash o r o th e r im m ed ia te ly available f u n d s o r in m aturing T reasu ry bills. PAUL A. VOLCKER, P residen t.
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