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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent o f the United States C ir c u l a r N o . 8959 N o v e m b e r 2 1 , 1980 Offering of $4,500,000,000 of 364-Day Treasury Bills Dated December 4,1980 Due December 3,1981 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: F o llo w in g is the text o f a n otice issued to d a y b y the T reasu ry D ep artm en t: T h e D e p a r t m e n t o f t h e T r e a s u r y , b y th is p u b l i c n o t i c e , in v it e s t e n d e r s f o r a p p r o x i m a t e l y $ 4 , 5 0 0 m il l i o n o f 3 6 4 - d a y T r e a s u r y b ills t o b e d a t e d c l o s e o f b u s in e s s o n t h e d a y p r i o r t o t h e a u c t i o n . S u c h p o s i t i o n s w o u l d i n c l u d e b ills a c q u i r e d t h r o u g h “ w h e n i s s u e d ” t r a d in g , a n d fu t u r e s a n d f o r D e c e m b e r 4 , 1 9 8 0 , a n d t o m a t u r e D e c e m b e r 3 , 1981 ( C U S I P N o . 9 1 2 7 9 3 w a r d t r a n s a c t i o n s . D e a le r s w h o m a k e p r i m a r y m a r k e t s in G o v e r n m e n t 7 B 6 ) . T h i s is s u e w ill p r o v i d e a b o u t $ 3 5 0 m i l l i o n n e w c a s h f o r t h e T r e a s u r y s e c u r it ie s a n d r e p o r t d a il y t o t h e F e d e r a l R e s e r v e B a n k o f N e w Y o r k t h e ir as t h e m a t u r in g 5 2 - w e e k b i ll w a s o r i g in a l l y is s u e d in th e a m o u n t o f $ 4 ,1 3 3 p o s i t i o n s in a n d b o r r o w i n g s o n s u c h s e c u r it ie s , w h e n s u b m i t t i n g t e n d e r s f o r c u s t o m e r s , m u st s u b m it a s e p a ra te te n d e r f o r e a c h c u s t o m e r w h o s e n et m illio n . l o n g p o s i t i o n in t h e b ills b e i n g o f f e r e d e x c e e d s $ 2 0 0 m il l i o n . T h e b ills w ill b e is s u e d f o r c a s h a n d in e x c h a n g e f o r T r e a s u r y b ills m a t u r in g D e c e m b e r 4 , 1 9 8 0 . In a d d i t i o n t o t h e m a t u r in g 5 2 - w e e k b ills , t h e r e a r e $ 7 ,6 3 5 m i l l i o n o f m a t u r in g b ills w h ic h w e r e o r i g in a l l y is s u e d as P a y m e n t f o r t h e fu l l p a r a m o u n t o f t h e b ills a p p li e d f o r m u s t a c c o m p a n y a ll t e n d e r s s u b m i t t e d f o r b ills t o b e m a i n t a i n e d o n t h e b o o k - e n t r y 1 3 -w e e k a n d 2 6 - w e e k b ills . T h e d i s p o s i t i o n o f th is la tt e r a m o u n t w ill b e r e c o r d s o f th e D e p a r tm e n t o f th e T r e a s u r y . A a n n o u n c e d n ex t w e e k . F e d e ra l R e se rv e B a n k s as a g en ts f o r fo r e ig n a n d m a d e o n a ll a c c e p t e d t e n d e r s f o r t h e d i f f e r e n c e b e t w e e n t h e p a r p a y m e n t in t e r n a t i o n a l m o n e t a r y a u t h o r it ie s s u b m i t t e d a n d th e a c t u a l is s u e p r i c e a s d e t e r m in e d in t h e a u c t i o n . c u r r e n t ly h o ld $ 2 ,5 3 8 m illio n , a n d c a s h a d ju s t m e n t w ill b e F e d e r a l R e s e r v e B a n k s f o r t h e ir o w n a c c o u n t h o l d $ 3 ,1 9 9 m i l l i o n o f t h e m a t u r in g b ills . T h e s e a m o u n t s r e p r e s e n t t h e c o m b i n e d h o l d i n g s o f s u c h a c c o u n t s f o r t h e t h r e e is s u e s o f m a t u r in g b ills . T e n d e r s f r o m F ederal N o d e p o s it n e e d a c c o m p a n y te n d e rs fr o m tr u s t c o m p a n i e s a n d f r o m in c o r p o r a te d b a n k s a n d r e s p o n s ib l e a n d r e c o g n i z e d d e a le r s in in v e s t R e s e r v e B a n k s f o r t h e m s e lv e s a n d a s a g e n t s f o r f o r e i g n a n d i n t e r n a t io n a l m e n t s e c u r it ie s f o r b ills t o b e m a i n t a i n e d o n t h e b o o k - e n t r y r e c o r d s o f m o n e t a r y a u t h o r i t i e s w ill b e a c c e p t e d a t t h e w e ig h t e d a v e r a g e p r i c e o f a c F ed era l R eserv e B an k s a n d B ra n ch es. c e p t e d c o m p e t i t i v e t e n d e r s . A d d i t i o n a l a m o u n t s o f th e b ills m a y b e is s u e d to F ed era l R eserve B an k s, as a g en ts fo r fo re ig n and i n t e r n a t io n a l m o n e t a r y a u th o r itie s , t o th e e x te n t th a t th e a g g r e g a te a m o u n t o f te n d e rs f o r s u c h a c c o u n t s e x c e e d s t h e a g g r e g a t e a m o u n t o f m a t u r in g b ills h e ld b y t h e m . F o r p u r p o s e s o f d e t e r m in in g s u c h a d d i t i o n a l a m o u n t s , f o r e i g n a n d i n t e r n a t i o n a l m o n e t a r y a u t h o r it ie s a r e c o n s i d e r e d t o h o l d $ 1 ,1 1 8 m i l l i o n o f t h e o r i g in a l 5 2 - w e e k is s u e . P u b l i c a n n o u n c e m e n t w ill b e m a d e b y th e D e p a r t m e n t o f t h e T r e a s u r y o f t h e a m o u n t a n d p r i c e r a n g e o f a c c e p t e d b i d s . C o m p e t i t i v e b i d d e r s w ill b e a d v i s e d o f t h e a c c e p t a n c e o r r e j e c t i o n o f t h e ir t e n d e r s . T h e S e c r e t a r y o f t h e T r e a s u r y e x p r e s s ly r e s e r v e s t h e r ig h t t o a c c e p t o r r e je c t a n y o r a ll t e n d e r s , in w h o l e o r in p a r t , a n d t h e S e c r e t a r y ’ s a c t i o n s h a ll b e f i n a l . S u b j e c t t o t h e s e r e s e r v a t i o n s , n o n c o m p e t i t i v e t e n d e r s f o r $ 5 0 0 ,0 0 0 o r less w i t h o u t s t a t e d p r i c e f r o m a n y o n e b i d d e r w ill b e a c c e p t e d in f u l l a t th e T h e b ills w ill b e is s u e d o n a d i s c o u n t b a s is u n d e r c o m p e t i t i v e a n d n o n w e i g h t e d a v e r a g e p r i c e (in t h r e e d e c i m a l s ) o f a c c e p t e d c o m p e t i t i v e b i d s . c o m p e t i t i v e b i d d i n g , a n d a t m a t u r it y t h e ir p a r a m o u n t w ill b e p a y a b le w i t h o u t in t e r e s t. T h i s s e r ie s o f b ills w ill b e is s u e d e n t ir e ly in b o o k - e n t r y S e t t le m e n t f o r a c c e p t e d t e n d e r s f o r b ills t o b e m a i n t a i n e d o n t h e b o o k - f o r m in a m in i m u m a m o u n t o f $ 1 0 , 0 0 0 a n d in a n y h ig h e r $ 5 ,0 0 0 m u lt ip le , o n t h e r e c o r d s e it h e r o f t h e F e d e r a l R e s e r v e B a n k s a n d B r a n c h e s , o r o f en try re c o rd s o f F ed era l R eserv e B an k s a n d B ra n ch es m u st b e m a d e o r th e D e p a r tm e n t o f th e T r e a s u r y . in c a s h o r o t h e r im m e d i a t e l y a v a i l a b l e f u n d s o r in T r e a s u r y b ills m a t u r in g c o m p le t e d a t th e F e d e ra l R e s e rv e B a n k o r B r a n ch o n D e c e m b e r 4 , 198 0 , D ecem ber T e n d e r s w ill b e r e c e iv e d at F e d e r a l R e s e r v e B a n k s a n d B r a n c h e s a n d at t h e B u r e a u o f t h e P u b l i c D e b t , W a s h i n g t o n , D . C . 2 0 2 2 6 , u p t o 1 :3 0 p . m . , E astern S ta n d a rd t im e , W ed n esd ay, N ovem ber 26, 1980. F orm 4, 1980. C ash a d ju s t m e n t s w ill be m ade fo r d iffe r e n c e s b e t w e e n th e p a r v a lu e o f m a t u r in g b ills a c c e p t e d in e x c h a n g e a n d t h e is s u e p r i c e o f t h e n e w b ills . PD 4 6 3 2 -1 s h o u l d b e u s e d t o s u b m it t e n d e r s f o r b ills t o b e m a i n t a i n e d o n t h e U n d e r S e c t io n s 4 5 4 ( b ) a n d 1 2 2 1 (5 ) o f t h e I n t e r n a l R e v e n u e C o d e o f 1 9 5 4 t h e a m o u n t o f d i s c o u n t a t w h ic h t h e s e b ills a r e s o l d is c o n s i d e r e d t o b o o k -e n t r y r e c o r d s o f th e D e p a r tm e n t o f th e T r e a s u r y . a c c r u e w h e n t h e b ills a r e s o l d , r e d e e m e d o r o t h e r w is e d i s p o s e d o f , a n d t h e E a c h t e n d e r m u s t b e f o r a m in i m u m o f $ 1 0 ,0 0 0 . T e n d e r s o v e r $ 1 0 ,0 0 0 m u s t b e in m u lt ip le s o f $ 5 ,0 0 0 . In t h e b ills a r e e x c l u d e d f r o m c o n s i d e r a t i o n a s c a p i t a l a s s e t s . A c c o r d i n g l y , t h e c a s e o f c o m p e t it iv e te n d e rs , th e o w n e r o f t h e s e b ills ( o t h e r t h a n l i f e i n s u r a n c e c o m p a n i e s ) m u s t i n c l u d e in p r i c e o f f e r e d m u s t b e e x p r e s s e d o n t h e b a s is o f 1 0 0 , w it h n o t m o r e t h a n h is o r h e r F e d e r a l i n c o m e t a x r e t u r n , as o r d i n a r y g a in o r l o s s , t h e d i f th re e d e c im a ls , e .g ., 9 9 .9 2 5 . F r a c tio n s m a y n o t b e u s e d . B a n k in g in s t it u t io n s and d e a le r s who m ake p r im a r y f e r e n c e b e t w e e n t h e p r i c e p a id f o r t h e b i ll s , w h e t h e r o n o r i g in a l is s u e o r m a rk e ts in G o v e r n m e n t s e c u r it ie s a n d r e p o r t d a il y t o t h e F e d e r a l R e s e r v e B a n k o f N e w Y o r k t h e ir p o s i t i o n s in a n d b o r r o w i n g s o n s u c h s e c u r it ie s m a y s u b m it t e n d e r s f o r a c c o u n t o f c u s t o m e r s , i f th e n a m e s o f t h e c u s t o m e r s a n d th e a m o u n t f o r e a ch c u s t o m e r a re fu r n is h e d . O th e r s a re o n ly p e r m itte d to o n s u b s e q u e n t p u r c h a s e , a n d th e a m o u n t a c t u a l ly r e c e iv e d e it h e r u p o n s a le o r r e d e m p t i o n at m a t u r it y d u r i n g t h e t a x a b l e y e a r f o r w h ic h th e r e t u r n is m a d e . D ep a rtm en t of th e T r e a s u r y C ir c u l a r s , P u b lic D ebt S e r ie s — N o s . 2 6 - 7 6 a n d 2 7 - 7 6 , a n d th is n o t i c e , p r e s c r i b e t h e t e r m s o f t h e s e T r e a s u r y s u b m i t t e n d e r s f o r t h e ir o w n a c c o u n t . E a c h t e n d e r m u s t s ta te t h e a m o u n t b ills a n d g o v e r n t h e c o n d i t i o n s o f t h e ir is s u e . C o p i e s o f th e c i r c u la r s a n d o f a n y n e t l o n g p o s i t i o n in t h e b ills b e i n g o f f e r e d i f s u c h p o s i t i o n is in e x te n d e r fo r m s m a y b e o b ta in e d fr o m a n y F e d e ra l R e se rv e B a n k o r B ra n ch , c e s s o f $ 2 0 0 m il l i o n . T h i s i n f o r m a t i o n s h o u l d r e f l e c t p o s i t i o n s h e ld a t th e o r f r o m th e B u re a u o f th e P u b lic D e b t. Tenders will be received up to 1:30 p.m., Eastern Standard time, Wednesday, November 26, 1980, at the Securities Department o f 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 Government Bond Division of this Bank. Tenders not requiring a deposit may be submit ted by telegraph, subject to written confirmation; no tenders may be submitted by telephone. Payment f o 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 Treasury securities maturing on or before the issue date. Anthony M . Solomon, President.