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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States Circular No. 8 9 4 6 1 November 5, 1980 J OFFERING OF T W O SERIES OF TR E A SU R Y BILLS $4,000,000,000 of 91-Day Bills, To Be Issued November 13, 1980, Due February 12, 1981 $4,000,000,000 of 182-Day Bills, To Be Issued November 13, 1980, Due May 14, 1981 To All Incorporated Banks and Trust Companies, and Othe'rs 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 $8,000 million, to be issued November 13, 1980. This offering will provide $450 million of new cash for the Treasury as the maturing bills are outstanding in the amount of $7,545 million, including $1,884 million currently held by Federal Reserve Banks as agents for foreign and international monetary authorities, and $1,649 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 $4,000 million, representing an additional amount of bills dated August 14, 1980, and to mature February 12, 1981 (C U S IP No. 912793 6F8), currently outstanding in the amount of $3,927 million, the additional and original bills to be freely interchangeable. 182-day bills for approximately $4,000 million, to be dated November 13, 1980, and to mature May 14, 1981 (C U S IP No. 912793 6R2). Both series of bills will be issued for cash and in exchange for Treasury bills maturing November 13, 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 Standard time, Monday, November 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 York 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. No 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. Public announcement 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 $500,000 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 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 November 13, 1980, in cash or other immediately available funds or in Treasury bills maturing November 13, 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 Trea sury bills and govern the conditions of their issue. Copies of the circulars and tender forms may be obtained from 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 Standard time, Monday, November 10, 1980, at the Securities Department o f 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 enclosed envelope marked “ T en der for Treasury Bills.” Forms for submitting tenders directly to the Treasury are available from the Government Bond 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 for 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 Treasury securities maturing on or before the issue date. Results of the last weekly offering o f Treasury bills are shown on the reverse side o f this circular. A n th o n y M. S o l o m o n , P resid en t. ( over) RESULTS OF LA ST W E E K L Y OFFERING OF T R E A SU R Y BILLS (T W O SERIES TO BE ISSUED N O VEM BER 6, 1980) Range of Accepted Competitive Bids p i-Day Treasury Bills Maturing February 5 , 1981 Price HiSh .................................................. L o w ................................................... A vera ge............................................ 96.663a 96.613 96.627 Discount Rate Investment Rate1 13.201% 13.399% 13.344% 13.85% 14.06% 14.00% 182-Day Treasury Bills Maturing May 7 , 1981 Price Discount Rate Investment Rate1 93.311b 93.273 93.292 13.231% 13.306% 13.269% 14.38% 14.46% 14.42% 1 Equivalent coupon-issue yield. a Excepting three tenders totaling $1,880,000. b Excepting two tenders totaling $1,095,000. (81 percent of the amount of 91-day bills bid for at the low price was accepted.) (47 percent of the amount o f 182-day bills bid for at the low price was accepted.) Total Tenders Received and Accepted 91-Day Treasury Bills Maturing February 5 , 1981 B y F .R . D is tr ic t ( and U S . T r e a s u r y ) R e c e iv e d B o ston................... $ 69,995,000 New Y o rk ...... 5,917,625,000 P hiladelphia................................... 38,795,000 C leveland......................................... 73,300,000 R ichm ond............. 50,340,000 A tla n ta .................. 58,585,000 C hicago............................................ 378,655,000 St. L o u is.......................................... 24,835,000 M inneapolis.................................... 13,555,000 Kansas C ity .................................... 48,915,000 D allas................................................ 28,970,000 San F ran cisco ................................ 432,375,000 U.S. T re a su ry ............................... 153,785,000 T o t a l s .................................... $7,289,730,000 $ A ccep ted 182-Day Treasury Bills Maturing May 7 , 1981 R e c e iv e d A c c e p te d 53,995,000 3,124,855,000 38,795,000 73,300,000 48,340,000 57,935,000 136,755,000 24,835,000 13,555,000 48,915,000 28,970,000 97,375,000 153,785,000 $3,901,410,000 99,095,000 6,337,910,000 26,445,000 64,605,000 82,735,000 54,655,000 529,990,000 30,910,000 11,675,000 43,865,000 11,890,000 422,215,000 173,720,000 $7,889,710,000 54,095,000 3,146,955,000 26,445,000 39,605,000 60,535,000 54,155,000 149,990,000 30,910,000 10,675,000 43,865,000 11,880,000 97,215,000 173,720,000 $3,900,045,000 $1,404,140,000 971,590,000 $2,375,730,000 770,830,000 754,850,000 $3,901,410,000 $5,300,905,000 838,145,000 $6,139,050,000 965,000,000 785,660,000 $7,889,710,000 $1,511,240,000 838,145,000 $2,349,385,000 765,000,000 785,660,000 $3,900,045,000 $ $ B y class o f bidder Public Competitive .............................. $4,492,460,000 971,590,000 Noncompetitive ....................... S ubtotals ............................ $5,464,050,000 Federal R e se rv e ............................ 1,070,830,000 754,850,000 Foreign Official Institutions .... $7,289,730,000 T ................................................. o ta ls An additional $93,330,000 of 13-week bills and an additional $92,840,000 of 26-week bills will be issued to foreign official institutions for new cash.