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FED ER AL RESERVE BANK O F N EW YORK Fiscal Agent of the United States [ O F F E R IN G OF TW O S E R IE S OF TREASURY Circular No. 8 6 5 4 ~| October 10, 1979 J B IL L S 1 2 ,9 0 0 ,0 0 0 ,0 0 0 o f 9 1 -D a y B ills , A d d itio n a l A m o u n t, S e r ie s D a te d J u ly 1 9 , 1 9 7 9 , D u e J a n u a r y 1 7 , 1 9 8 0 (T o B e Issu e d O cto b er 1 8 , 1 9 7 9 ) $ 3 ,0 0 0 ,0 0 0 ,0 0 0 o f 1 8 2 -D a y B ills , D a te d O cto b er 1 8 , 1 9 7 9 , D u e A p r il 1 7 , 1 9 8 0 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text of a notice issued by the Treasury Department: The Department of the Treasury, by this public notice, invites tenders for tw o series of Treasury bills totaling approximately $5,900 million to be issued October 18, 1979. T his offering will not provide new cash for the Treasury as the maturing bills are outstanding in the amount of $5,935 million. The tw o series offered are as fo llo w s: 91-day bills (to maturity date) for approxim ately $2,900 million, representing an additional amount of bills dated July 19, 1979, and to mature January 17, 1980 (C U S IP N o. 912793 3 M 6 ), originally issued in the amount of $3,024 million, the additional and original bills to be freely interchangeable. 182-day bills for approximately $3,000 million to be dated October 18, 1979, and to mature April 17, 1980 (C U S IP N o. 912793 4 A 1 ). Both series of bills w ill be issued for cash and in exchange for Treasury bills maturing October 18, 1979. Federal Reserve Banks, for them selves and as agents of foreign and international monetary authorities, presently hold $3,016 million of the maturing bills. These accounts may exchange bills they hold for the bills now being offered at the weighted average prices of accepted competi tive 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. Both series of bills w ill 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, W ashington, D.C. 20226, up to 1 :30 p.m., Eastern D aylight Saving time, Monday, October 15, 1979. Form P D 4632-2 (for 26-week series) or Form P D 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 N ew Y ork, their positions in and borrowings on such securities may submit tenders for account of customers, if the names of the customers and the amount of 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 excess of $200 million. T his 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 forward transactions as well as holdings of outstanding bills with the same maturity date as the new offering, e.g., bills with three months to maturity previously offered as six month bills. Dealers who make primary markets in Government securities and report daily to the Federal Reserve Bank of N ew Y ork their positions in and borrowings on such securities, when submitting tenders for cus tomers, must submit a separate tender for each customer whose net long position in the bill being offered exceeds $200 million. Paym ent for the full par amount of the bills applied for must accompany all tenders submitted for bills to be maintained on the book-entry records of the Department of the Treasury. A cash adjustment w ill be made on all accepted tenders for the difference between the par payment submitted and the actual issue price as determined in the auction. N o deposit need accompany tenders from incorporated banks and trust companies and from responsible and recognized dealers in investment 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 accom pany tenders for such bills from others, unless an express guaranty of payment by an incorporated bank or trust company accompanies the tenders. Public announcement w ill 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 w ill be accepted in full at the weighted average price (in three decim als) of accepted competitive bids for the respective issues. Settlem ent for accepted tenders for bills to be maintained on the book-entry records of Federal Reserve Banks and Branches must be made or completed at the Federal Reserve Bank or Branch on October 18, 1979, in cash or other immediately available funds or in Treasury bills maturing October 18, 1979. Cash adjustments will be made for differences between the par value of the matur ing bills accepted in exchange and the issue price of the new bills. Under Sections 45 4 (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, Public Debt Series— N os. 26-76 and 27-76, and this notice, prescribe the terms of these T reas ury bills and govern the conditions of their issue. Copies of the circulars and tender forms may be obtained from any Federal R e serve Bank or Branch, or from the Bureau o f the Public Debt. This Bank will receive tenders for both series up to 1:30 p.m.. Eastern Daylight Saving time, Monday, October 15, 1979, 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 “Ten der for Treasury Bills.” Forms for submitting tenders directly 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 writ ten confirmation; no tenders may be submitted by telephone. Payment for Treasury hills 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 last weekly offering of Treasury bills are shown on the reverse side of this circular. T homas M. T im l e n , First Vice President. ( over) R E S U L T S O F L A S T W E E K L Y O F F E R IN G O F T R E A S U R Y B IL L S (T W O S E R IE S T O B E IS S U E D O C T O B E R 1 1 , 1 9 7 9 ) Range of Accepted Competitive Bids 18 2 -Day Treasury Bills Maturing April 10 ,19 8 0 9 1 -Day Treasury Bills Maturing January io, 1980 Price H igh............................................. Low ............................................... Average........................................ 97.308“ 97.240 97.268 Discount Rate Investment Rate1 Price Discount Rate Investment Rate1 10.650% 10.919% 10.808% 11.13% 11.42% 11.30% 94.629b 94.592 94.610 10.624% 10.697% 10.662% 11.41% 11.50% 11.46% b Excepting two tenders totaling $710,000. 1 Equivalent coupon-issue yield. a Excepting two tenders totaling $1,260,000. (95 percent of the amount of 182-day bills bid for at the low price was accepted.) (48 percent of the amount of 91-day bills bid for at the low price was accepted.) Total Tenders Received and Accepted 9 1 -Day Treasury Bills Maturing January 10 ,19 8 0 Boston..................................... New Y ork............................... Philadelphia............................ Cleveland ................................. Richmond................................ Atlanta............................. ....... Chicago.................................... St. Louis.................................. Minneapolis............................. Kansas City............................. Dallas....................................... San Francisco......................... Accepted Received By F.R. District (and US. Treasury) $ 35,835,000 2,957,035,000 44,610,000 56,845,000 36,575,000 36,775,000 386,045,000 14,185,000 4,820,000 41,920,000 16,605,000 180,840,000 $ 18 2 -Day Treasury Bills Maturing April 10 ,19 8 0 Received 35,835,000 2,207,035,000 19,610,000 31,845,000 36,575,000 36,775,000 289,045,000 14,085,000 4,820,000 41,920,000 16,605,000 120,840,000 $ 21,705.000 3,924,055,000 14,605,000 46,710,000 26,885,000 27,360,000 366,310,000 21.400,000 5,510,000 29,765,000 21,890,000 197,820,000 Accepted $ 21,705,000 2,479,255,000 13,615,000 21,710,000 26,885,000 26,860,000 196,210,000 17,400,000 5,510,000 29,765,000 11,890,000 87,820,000 U.S. Treasury.......................... 45,570,000 45,570,000 61,550,000 61,550,000 T o ta ls ............................. $3,857,660,000 $2,900,560,000 $4,765,565,000 $3,000,175,000 $2,177,235,000 472,075,000 $1,220,135,000 472,075,000 $2,600,860,000 398,055,000 $ 835,470,000 398,055,000 By class of bidder Public Competitive ........................ Noncompetitive ................... S ubtotals ...................... Federal Reserve, and Foreign Official Institutions ............. $2,649,310,000 $1,692,210,000 $2,998,915,000 $1,233,525,000 $1,208,350,000 $1,208,350,000 $1,766,650,000 $1,766,650,000 T otals ................................. $3,857,660,000 $2,900,560,000 $4,765,565,000 $3,000,175,000
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