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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States Circular No. 8674 November 2, 1979 Offering of $3,890,000,000 of 359-Day Treasury Bills Dated November 13,1979 Due November 6,1980 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 o f the Treasury, by this public notice, invites tenders for approximately $3,890 million of 359-day Treasury bills to be dated November 13, 1979, and to mature November 6, 1980 (CUSIP No. 912793 4R4). This issue will not provide new cash for the Treasury as the maturing issue is outstanding in the amount of $3,896 million. The bills will be issued for cash and in exchange for Treasury bills maturing November 13, 1979. The public holds $1,517 million of the maturing issue and $2,379 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 Standard time, Wednesday, November 7, 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 bills 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 November 13, 1979, in cash or other immediately available funds or in Treasury bills maturing November 13, 1979. Cash adjustments will be made for differences be tween 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 o f the Public Debt. Tenders will be received up to 1:30 p.m., Eastern Standard time, Wednesday, November 7, 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 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 written confirmation; no tenders may be submitted by telephone. Payment fo r 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. Please note that this offering is for 359-day Treasury Bills, TREASURY DEPARTMENT Washington, D .C . STATEMENT FOR THE PRESS FOR RELEASE AT 4:00 P.M. November 1, 1979 52-WEEK BILL DATING CHANGE The Department of the Treasury announced today that it is beginning a transition that, when completed, will change the issue and maturity dates of 52-week bills from Tuesdays to Thursdays. During the one-year transition period, the Department will continue to issue 52-week bills on Tuesdays but will set a maturity date 359 days later to occur on a Thursday. In a separate announcement today, the Department offered the first issue of 52-week bills with this dating pattern. When the transition cycle is completed, both the issue and maturity dates will be on Thursdays and the full 364-day maturity period will be resumed. The Department said that the dating change is being made to make the 52-week bills mature on the same date as 13- and 26-week bills. The amount of each 52-week bill issue will be enlarged by subsequent issues of 13- and 26-week bills with the same maturity date. This will reduce the number of separate bill issues outstanding, facilitate market trading, and improve liquidity for the 52-week bills.
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