Full text of Federal Reserve Bank of New York Circulars : 8620. Offering of $3,540,000,000 of 364-Day Treasury Bills

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FE D E R A L R ESER VE BANK
O F N E W YORK
Fiscal Agent of the United States

Circular No. 8620
August 10, 1979

Offering of $3,540,000,000 of 364-Day Treasury Bills
Due August 19,1980

Dated August 21,1979
To All Incorporated Banks and Trust Companies, and Others
Concerned, in the Second Federal Reserve District:

Following is the text of a notice issued yesterday by the Treasury Department:
The Department of the Treasury, by this public notice, invites tenders
for approximately $3,540 million of 364-day Treasury bills to be dated
August 21, 1979, and to mature August 19, 1980 (CUSIP No. 912793
4N3). This issue will not provide new cash for the Treasury as the matur­
ing issue is outstanding in the amount of $3,544 million.
The bills will be issued for cash and in exchange for Treasury bills
maturing August 21, 1979. The public holds $1,943 million of the matur­
ing issue and $1,601 million is held by Federal Reserve Banks for
themselves and as agents of foreign and international monetary
authorities. Tenders from Federal Reserve Banks for themselves and as
agents of foreign and international monetary authorities will be accepted
at the weighted average price of accepted competitive tenders. Additional
amounts of the bills may be issued to Federal Reserve Banks, as agents of
foreign and international monetary authorities, to the extent that the ag­
gregate amount of tenders for such accounts exceeds the aggregate
amount of 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 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 Daylight Saving time, Wednesday, August 15, 1979. Form
PD 4632-1 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 sub­
mit 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. Each tender must state the amount
of any net long position in the bills being offered if such position is in ex­
cess of $200 million. This information should reflect positions held at the
close of business on the day prior to the auction. Such positions would in­
clude bills acquired through “ when issued” trading, and futures and for­
ward transactions. 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, when submitting tenders

for customers, must submit a separate tender for each customer whose net
long position in the bill being offered exceeds $200 million.
Payment for the full par amount of the bills applied for must accom­
pany 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 from responsible and recognized dealers in invest­
ment securities for bills to be maintained on the book-entry records of
Federal Reserve Banks and Branches. 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. Competitive 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. 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) of accepted competitive bids.
Settlement for accepted tenders for bills to be maintained on the bookentry records of Federal Reserve Banks and Branches must be made or
completed at the Federal Reserve Bank or Branch on August 21, 1979, in
cash or other immediately available funds or in Treasury bills maturing
August 21, 1979. Cash adjustments will be made for differences between
the par value of 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 otherwise 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 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 of the Treasury Circulars, 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.

Tenders will be received up to 1:30 p.m., Eastern Daylight Saving time, Wednesday, August 15, 1979, at the
Securities Department of this Bank’s Head Office, at our Buffalo Branch , or at the Bureau of the Public Debt. The
enclosed form should be used for submitting tenders through a financial institution. Forms for submitting tenders direct­
ly to the Treasury are available from the Treasury and Agency Issues Division of this Bank. Tenders not requiring a
deposit may be submitted by telegraph, subject to written confirmation; no tenders may be submitted by telephone. Pay­
ment for the 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.



T h o m a s M . T im l e n ,

First Vice President.