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FEDERAL RESERVE BANK O F NEW YORK Fiscal Agent of the United States No. 9 0 0 6 1 January 20, 1981 J [Circular OFFERING OF TWO SERIES OF TREASURY BILLS $4,300,000,000 of 91-Day Bills, To Be Issued January 29, 1981, Due April 30, 1981 $4,300,000,000 of 182-Day Bills, To Be Issued January 29, 1981, Due July 30, 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: T h e D e p a r t m e n t o f th e T r e a s u r y , b y th is p u b lic n o t ic e , in v ite s t e n d e rs f o r t w o s e r ie s o f T r e a s u r y b ills t o t a lin g a p p r o x im a t e ly $ 8 ,6 0 0 m illio n , t o b e is s u e d J a n u a r y 2 9 , 1981. T h i s o f f e r i n g w ill p r o v id e $6 75 m illio n o f n e w c a s h f o r th e T r e a s u r y a s th e m a tu r in g b ills w e r e o r i g i n a l l y issu e d in th e a m o u n t o f $ 7 ,9 3 0 m illio n . T h e t w o se r ie s o ff e r e d a r e a s f o l l o w s : 9 1 -d a y b ills ( t o m a tu r ity d a t e ) f o r a p p r o x im a t e ly $ 4 ,3 0 0 m illio n , r e p r e s e n tin g a n a d d itio n a l a m o u n t o f b ills d a te d O c t o b e r 30, 1980, a n d t o m a tu r e A p r i l 30, 1981 ( C U S I P N o . 9 1 2 7 9 3 6 P 6 ) , c u r r e n t ly o u t s t a n d in g in th e a m o u n t o f $ 7 ,9 2 3 m illio n , th e a d d itio n a l a n d o r ig in a l b ills t o b e fr e e ly in t e r c h a n g e a b le . 1 8 2 -d a y b ills f o r a p p r o x im a t e ly $ 4 ,3 0 0 m illio n , t o b e d a te d J a n u a r y 2 9 , 1981, a n d t o m a tu r e J u ly 30 , 1981 ( C U S I P N o . 912793 7 N 0 ) . B o t h se r ie s o f b ills w ill b e issu 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 tu r in g J a n u a r y 29, 1981. I n a d d itio n t o th e m a t u r in g 1 3 -w e e k a n d 2 6 -w e e k b ills , th e r e a r e $ 3 ,9 8 9 m illio n o f m a t u r in g 5 2 -w e e k b ills . T h e d is p o s it io n o f th is la t te r a m o u n t w a s a n n o u n c e d la s t w e e k . F e d e r a l R e s e r v e B a n k s , a r e a g e n ts f o r f o r e i g n a n d in t e r n a tio n a l m o n e t a r y a u th o r it ie s , c u r r e n t ly h o ld $2,741 m i l lio n , a n d F e d e r a l R e s e r v e B a n k s f o r th e ir o w n a c c o u n t h o ld $ 2 ,3 1 3 m illio n o f th e m a tu r in g b ills . T h e s e a m o u n ts r e p r e s e n t th e c o m b in e d h o ld in g s o f su ch a c c o u n t s f o r th e th r e e issu e s o f m a tu r in g b ills. T e n d e r s fr o m F e d e r a l R e s e r v e B a n k s f o r th e m s e lv e s a n d as a g e n ts f o r fo r e i g n a n d in te r n a tio n a l m o n e t a r y a u th o r it ie s w ill be a c c e p t e d at th e w e ig h t e d a v e r a g e p r ic e s o f a c c e p t e d c o m p e t it iv e te n d e rs . A d d it io n a l a m o u n ts o f th e b ills m a y b e issu e d t o F e d e r a l R e s e r v e B a n k s , a s a g e n ts f o r fo r e i g n a n d in te r n a tio n a l m o n e t a r y a u th o r it ie s , t o th e e x t e n t th a t th e a g g r e g a t e a m o u n t o f t e n d e rs f o r su ch a c c o u n t s e x c e e d s th 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 th em . F o r p u r p o s e s o f d e t e r m in in g su ch a d d itio n a l a m o u n ts , f o r e ig n a n d in te r n a tio n a l m o n e t a r y a t h o r it ie s a r e c o n s id e r e d to h o ld $ 2 ,0 8 9 m illio n o f th e o r ig in a l 1 3 -w e e k a n d 2 6 -w e e k issu es. T h e b ills w ill b e issu e d o n a d is c o u n t b a s is u n d e r c o m p e t it iv e a n d n o n c o m p e tit iv e b id d in g , a n d a t m a tu r ity th e ir p a r a m o u n t w ill b e p a y a b le w it h o u t in te re s t. B o t h se r ie s o f b ills w ill b e issu e d e n t ir e ly in b o o k - e n t r y f o r m in a m in im 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 ltip le , o n th e r e c o r d s e it h e r o f th 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 th e D e p a r t m e n t o f the T r e a s u r y . T e n d e r s w ill b e r e c e iv e d a t 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 a t th e B u r e a u o f th e P u b lic D e b t , W a s h in g t o n , D .C . 2 0 2 2 6 , u p to 1 :3 0 p .m ., E a s t e r n S ta n d a r d tim e , M o n d a y , J a n u a r y 26, 1981. F o r m P D 4 6 3 2 -2 ( f o r 2 6 -w e e k s e r ie s ) o r F o r m PD 4 6 3 2 -3 ( f o r 1 3 -w e e k s e r i e s ) s h o u ld b e u s e d t o s u b m it t e n d e rs f o r b ills to be m a in ta in e d o n th e 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 the T r e a s u ry . E a c h te n d e r m u st b e f o r a m in im u m o f $ 1 0,00 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 ,000 . I n th e c a s e o f c o m p e t it iv e t e n d e rs th e p r ic e o ff e r e d m u s t b e e x p r e s s e d o n th e b a s is o f 100, w ith n o t m o r e th a n t h r e e d e c im a ls , e .g ., 9 9 .925 . F r a c t io n s m a y n o t b e u sed. B a n k in g in s titu tio n s a n d d e a le r s w h o m a k e p r im a r y m a r k 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 ily t o th 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 th e ir p o s it io n s in a n d b o r r o w i n g s o n su ch s e c u r it ie s m a y s u b m it t e n d e rs f o r a c c o u n t o f c u s t o m e r s , if th e n a m e s o f th 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 c h c u s t o m e r a re fu rn is h e d . O t h e r s a r e o n ly p e r m itt e d t o s u b m it t e n d e r s f o r th e ir o w n a c c o u n t . E a c h te n d e r m u s t sta te th e a m o u n t o f a n y n e t l o n g p o s it io n in th e b ills b e in g o f f e r e d i f s u ch p o s it io n is in e x c e s s o f $ 2 0 0 m illio n . T h i s in f o r m a t io n s h o u ld r e fle c t p o s it io n s h e ld a t th e c l o s e o f b u sin e ss o n th e d a y p r i o r t o th e a u c t io n . S u c h p o s it io n s w o u ld in c lu d e b ills a c q u ir e d t h r o u g h “ w h e n is s u e d ” t r a d in g , a n d fu tu r e s a n d f o r w a r d t r a n s a c t io n s a s w e ll a s h o ld in g s o f o u t s t a n d in g b ills w it h th e sa m e m a tu r ity d a te a s th e n e w o f f e r i n g , e .g ., b ills w it h th r e e m o n t h s t o m a tu r ity p r e v io u s ly o f f e r e d a s s i x m o n t h b ills . D e a le r s w h o m a k e p r im a r y m a r k 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 ily t o the 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 it io n s in a n d b o r r o w i n g s o n su ch s e c u r it ie s , w h e n s u b m it t in g t e n d e r s f o r c u s t o m e r s , m u s t s u b m it a se p a r a te t e 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 e t l o n g p o s it io n in th e b ill b e in g o f f e r e d e x c e e d s $ 2 0 0 m illio n . P a y m e n t f o r th e fu ll p a r a m o u n t o f th e b ills a p p lie d f o r m u s t a c c o m p a n y a ll t e n d e rs s u b m itte d f o r b ills t o b e m a in ta in e d o n the 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 t m e n t o f th e T r e a s u r y . A c a s h a d ju s t m e n t w ill b e 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 th e d iffe r e n c e b e t w e e n th e p a r p a y m e n t s u b m itte d a n d th e a c t u a l issu e p r ic e a s d e te r m in e d in th e a u c t io n . N o d e p o s it n e e d a c c o m p a n y t e n d e rs f r o m i n c o r p o r a t e d b a n k s a n d tru s t c o m p a n ie s a n d f r o m r e s p o n s ib le a n d r e c o g n i z e d d e a le r s in in v e s tm e n t s e c u r it ie s f o r b ills t o b e m a in t a in e d o n th e b o o k - e n t r y record s o f F ederal R eserv e B an ks and B ranches. 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 th e T r e a s u r y o f th e a m o u n t a n d p r ic e r a n g e o f a c c e p t e d b id s . C o m p e t i t iv e b id d e r s w ill b e a d v is e d o f th e a c c e p t a n c e o r r e je c t i o n o f th e ir te n d e rs . T h e S e c r e t a r y o f th 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 th 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 te n d e r s , in w h o le o r in p a rt, a n d th e S e c r e t a r y ’ s a c t io n sh a ll b e fin a l. S u b je c t t o th e s e r e s e r v a t io n s , n o n c o m p e t it iv e t e n d e rs f o r e a c h issu e f o r $ 5 0 0 ,0 0 0 o r le s s w it h o u t s ta te d p r ic e f r o m a n y o n e b id d e r w ill b e a c c e p t e d in fu ll a t th e w e ig h t e d a v e r a g e p r ic e ( i n t h r e e d e c im a ls ) o f a c c e p t e d c o m p e t it iv e b id s f o r th e r e s p e c t iv e issu e s. S e tt le m e n t f o r a c c e p t e d te n d e rs f o r b ills t o b e m a in t a in e d o n th e b o o k - e n t r y r e c o r d s o f 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 m u st b e m a d e o r c o m p le t e d a t th e F e d e r a l R e s e r v e B a n k o r B r a n c h o n J a n u a r y 29 , 1981, in c a s h o r o t h e r im m e d ia t e ly a v a ila b le fu n d s o r in T r e a s u r y b ills m a t u r in g J a n u a r y 29 , 1981. C a s h a d ju s t m e n ts w ill b e m a d e f o 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 th e 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 th e issu e p r ic e o f th e n e w b ills . 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 th e I n t e r n a l R e v e n u e C o d e o f 1954 th e a m o u n t o f d is c o u n t a t w h ic h th e s e b ills a r e s o ld is c o n s id e r e d t o a c c r u e w h e n th e b ills a r e s o ld , r e d e e m e d o r o t h e r w is e d is p o s e d o f , a n d th e b ills a re e x c lu d e d f r o m c o n s id e r a t io n as c a p ita l a ss e ts. A c c o r d i n g l y , th e o w n e r o f th e s e b ills ( o t h e r th a n life in s u r a n c e c o m p a n ie s ) m u s t in c lu d e in h is o r h e r F e d e r a l in c o m e t a x re tu rn , a s o r d in a r y g a in o r lo s s , th e d iffe r e n c e b e t w e e n th e p r ic e p a id f o r th e b ills , w h e t h e r o n o r ig in a l issu e o r o n s u b s e q u e n t p u r ch a s e , a n d th e a m o u n t a c t u a lly r e c e iv e d e it h e r u p o n sale o r r e d e m p tio n at m a tu r ity d u r in g th e t a x a b le y e a r f o r w h ic h th e r e tu rn is m a d e . D e p a r tm e n t o f th e T r e a s u r y C ir c u la r s , P u b l i c D e b t 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 ic e , p r e s c r ib e th e t e r m s o f th e s e T r e a s u r y b ills a n d g o v e r n th e c o n d it io n s o f th e ir issu e . C o p ie s o f th e c ir c u la r s a n d t e n d e r f o r m s m a y b e o b t a in e d f r o m a n y F e d e r a l R e s e r v e B a n k o r B r a n c h , o r f r o m th e B u r e a u o f th e P u b l i c D e b t . This Bank will receive tenders for both series up to 1:30 p.m., Eastern Standard time, Monday, January 26, 1J81, 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 enclosed envelope marked “ Tendei 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 m Treasury securities maturing on or before the issue date. A nthony M. Solomon, President.