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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States No. 8 9 2 7 1 [ Circular October 3, 1980 J OFFERING OF T W O SERIES OF T R E A SU R Y BILLS $3,900,000,000 of 91-Day Bills, To Be Issued October 16, 1980, Due January 15, 1981 $3,900,000,000 of 182-Day Bills, To Be Issued October 16, 1980, Due April 16, 1981 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 two series of Treasury bills totaling approximately $7,800 million to be issued October 16, 1980. This offering will provide $225 million of new cash for the Treasury as the maturing bills are outstanding in the amount of $7,568 million, including $912 million currently held by Federal Reserve Banks as agents for foreign and international monetary authorities, and $1,410 mil lion currently held by Federal Reserve Banks for their own account. The two series offered are as follow s: 91-day bills (to maturity date) for approximately $3,900 million, representing an additional amount of bills dated July 17, 1980, and to mature January 15, 1981 (C U S IP No. 912793 5V 4), currently outstanding in the amount of $4,017 million, the additional and original bills to be freely interchangeable. 182-day bills for approximately $3,900 million to be dated October 16, 1980, and to mature April 16, 1981 (C U S IP No. 912793 6N 1). Both series of bills will be issued for cash and in exchange for Treasury bills maturing October 16, 1980. Tenders from Federal Reserve Banks for themselves and as agents of foreign and inter national monetary authorities will be accepted at the weighted average prices 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 aggregate 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 noncompetitive bidding, and at maturity their par amount will be payable without interest. Both 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, Friday, October 10, 1980. Form PD 4632-2 (for 26-week series) or Form PD 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 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 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 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 excess 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 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 New York 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. Payment 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 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. N o deposit need accompany tenders from incorporated banks and trust companies and from responsible and recognized dealers m investment securities for bins to De maintained on tne book-entry records of Federal Reserve Banks and Branches. Public announcements will 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,OUU 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 for the respective issues. Settlement 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 16, 1980, in cash or other immediately available funds or in Treasury bills maturing October 16, 1980. Cash adjustments will be made for differences between the par value of the 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 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—Nos. 26-76 and 27-76, and this notice, prescribe the terms of these Treas ury bills and govern the conditions of their issue. Copies of the circulars and tender forms may be obtained front any Federal Re serve Bank or Branch, or from the Bureau of the Public Debt. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Friday, October io , 1980, at the Securities Department of its Head Office and at its Buffalo Branch. Tender forms for both series are enclosed. Please use the appropriate forms to submit tenders and return them in the der for Treasury Bills.” Forms for submitting tenders directly to the Treasury are Bond Division of this Bank. Tenders not requiring a deposit may be submitted ten confirmation; no tenders may be submitted by telephone. Payment for Treasury enclosed envelope marked “ Ten available from the Government by telegraph, subject to writ 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 Treasury securities maturing on or before the issue date. The results of bidding for the previous offering of Treasury bills, to be issued October 9, 1980, were not available at the time o f printing this circular; those results will be announced after release by the Treasury Department. A n th o n y Closing date for receipt of tenders is Friday, October 10. M. S , President. olom on
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