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FED ER A L RESERVE BANK O F N EW YORK Fiscal A gen t of the United States No. 9 0 1 4 1 February 4, 1981 J t Circular OFFERING OF TWO SERIES OF TREASURY BILLS $4,300,000,000 of 91-Day Bills, To Be Issued February 12, 1981, Due May 14, 1981 $4,300,000,000 of 182-Day Bills, To Be Issued February 12, 1981, Due August 13, 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 ep a rtm en t o f the T re a s u r y , b y this p u b lic n otice , invites ten d ers fo r t w o series o f T r e a s u r y b ills tota lin g a p p ro x im a te ly $8,600 m illion , to be issued F e b r u a r y 12, 1981. T h is o ffe r in g w ill p ro v id e $650 m illio n o f n ew ca sh fo r the T re a s u r y as the m a tu rin g b ills are o u tsta n d in g in the am ou n t o f $7,950 m illion , in clu d in g $1,873 m illio n cu rre n tly h eld b y F e d e ra l R e s e rv e B a n k s as ag en ts fo r fo r e ig n and in tern ation a l m on eta ry a u th orities, and $1,855 m illio n c u rre n tly h eld b y F e d e ra l R e s e r v e B an ks fo r their o w n accou n t. In the event that Congressional action on the debt ceiling legislation is delayed, the amount of these bill offerings may have to be reduced. T h e t w o series o ffe r e d a re a s f o l l o w s : 9 1 -d a y b ills ( t o m a tu rity d a te ) fo r a p p ro x im a te ly $4,300 m illion , rep resen tin g an a d d ition a l am oun t o f bills dated N o v e m b e r 13, 1980, and to m atu re M a y 14, 1981 ( C U S I P N o . 912793 6 R 2 ) , cu rre n tly ou tsta n d in g in the a m oun t o f $4,038 m illion , the ad d ition a l an d o rig in a l b ills to be fr e e ly in terch a n g ea b le. 18 2-d ay bills ( t o m a tu rity d a te ) fo r a p p ro x im a te ly $4,300 m illion , rep resen tin g an ad d ition a l a m oun t o f bills dated A u g u s t 19, 1980, and t o m atu re A u g u s t 13, 1981 ( C U S I P N o . 912793 6 X 9 ) , c u rre n tly ou tsta n d in g in the am oun t o f $4,009 m illion , the a d d ition a l an d o rig in a l b ills to be fr e e ly in terch a n g ea b le. B o th series o f b ills w ill be issued fo r ca sh and in e x ch a n g e fo r T r e a s u r y bills m a tu rin g F e b ru a ry 12, 1981. T e n d e rs fr o m F ed era l R e s e r v e B a n k s fo r th em selves an d as agen ts fo r fo r e ig n and in te r na tion al m on eta ry a u th orities w ill be a ccep ted at the w e ig h te d a v e ra g e p rice s o f a ccep ted com p etitiv e tenders. A d d itio n a l am oun ts o f the b ills m ay be issued to h e d e r a l R e s e rv e B a n k s, as a gen ts fo r fo r e ig n and in tern ation a l m o n e ta ry a u th orities, t o the ex te n t that the a g g r e g a te am oun t o f ten d ers fo r su ch a ccou n ts e x c e e d s the a g g r e g a te a m ou n t o f m a tu rin g bills h eld b y them . T h e b ills w ill be issued on a d iscou n t basis un der co m p e titiv e and n on com p etitiv e b id d in g , and at m a tu rity th eir p ar a m oun t wTill be p ayable w ith ou t interest. B o th series o f bills w ill be issued e n tire ly in b o o k -e n t r y fo r m in a m in im u m am ou n t o f $10,000 and in an y h ig h er $5,000 m ultiple, on the re co r d s eith er o f the F e d e ra l R e s e r v e B a n k s and B ra n ch es, o r o f the D ep a rtm en t o f the T re a s u ry . T e n d e rs w ill be receiv ed at F ed era l R e se rv e B an ks and B ra n ch es and at the B u rea u o f the P u b lic D eb t, W a s h in g to n , D .C . 20226, up to 1 :30 p .m ., E a stern S ta n d a rd tim e, M o n d a y , F e b r u a r y 9, 1981. F o r m P D 46 32-2 ( f o r 2 6 -w e e k s e r ie s ) o r F o r m P D 4632-3 ( f o r 1 3 -w eek s e r ie s ) sh ould be u sed t o subm it ten d ers fo r b ills to be m aintained o n the b o o k -e n t ry r e co r d s o f the D ep a rtm en t o f the T rea su ry. E a c h tend er m ust be fo r a m in im u m o f $10,000. T e n d e rs o v e r $10,000 m ust be in m u ltip les o f $5,000. In the case o f com p e titiv e ten d ers the p rice o ffe re d m ust be e x p re ss e d on the basis o f 100, w ith n ot m o re than three d ecim a ls, e.g., 99.925. F ra ctio n s m a y not be used. B a n k in g institutions and d ealers w h o m ake p rim a ry m arkets in G o v e rn m e n t secu rities and re p o r t d a ily to the F ed era l R e se rv e B a n k o f N e w Y o r k th eir p o sition s in and b o r r o w in g s o n such secu rities m a y su bm it tend ers fo r a cco u n t o f cu stom ers, if the nam es o f the cu stom ers and the a m ou n t fo r ea ch cu sto m e r are fu rn ish ed . O th e rs a re o n ly p erm itted to su bm it ten d ers fo r their o w n a ccou n t. E a ch tender m u st state the am ou n t o f a n y net lo n g p o sitio n in the b ills b e in g o ffe re d if su ch p osition is in e x c e s s o f $200 m illion . T h is in fo rm a tio n sh ou ld reflect p o sition s h eld as o f 1 2 :3 0 p.m ., E a stern tim e on the d a y o f the au ction . S u ch p osition s w o u ld in clu d e b ills a cq u ired th r o u g h “ w h en issu ed ” tra d in g, and fu tu res and fo r w a r d tra n sa ction s as w ell as h old in g s o f ou tsta n d in g b ills w ith the sam e m a tu rity date as the n ew o ffe r in g , e.g., b ills w ith three m onths to m a tu rity p re v io u s ly o ffe r e d as s ix m on th bills. D e a le rs w h o m ake p rim a ry m a rk ets in G ov ern m en t secu rities and rep o rt d a ily to the F e d e ra l R e se rv e B an k o f N e w Y o r k th eir p osition s in and b o r r o w in g s on su ch securities, w h en su bm itting tend ers fo r cu stom ers, m ust subm it a separate tender fo r e a ch cu sto m e r w h o se net lo n g p o sitio n in the bill b ein g o ffe re d e x ce e d s $200 m illion . P a y m e n t fo r the fu ll p ar am oun t o f the bills a p p lied f o r m ust a cco m p a n y all tend ers su bm itted f o r b ills to be m aintained o n the b o o k -e n t r y re co r d s o f the D e p a rtm e n t o f the T re a su ry . A cash a d ju stm e n t w ill be m ade on all a cce p te d tend ers f o r the d iffe re n ce b etw een the p ar p aym en t subm itted and the actual issue p rice as d eterm in ed in the au ction . N o d e p o sit need a cco m p a n y tend ers fr o m in co rp o ra te d banks an d tru st com p a n ies an d fr o m resp on sible and r e co g n iz e d d ealers in investm ent secu rities fo r b ills to be m aintained o n the b o o k -e n try r e co rd s o f F e d e ra l R e se rv e B an ks and B ranches, P u b lic an n ou n cem en t w ill be m ade b y the D e p a rtm e n t o f the T re a s u r y o f the am ou n t and p rice ran ge o f a cce p te d bids. C o m p e ti tive bid d e rs w ill be ad v ise d o f the a ccep ta n ce o r r e je c tio n o f their tenders. T h e S e cre ta ry o f the T re a s u r y e x p r e s s ly re se rve s the righ t to a cce p t o r r e je c t any o r all tend ers, in w h o le o r in part, and the S e c re ta r y ’ s a ctio n shall be final. S u b je c t to these reserva tion s, n o n com p etitiv e tenders fo r e a ch issue fo r $500,000 o r less w ith ou t stated p rice fr o m an y on e b id d e r w ill be a cce p te d in fu ll at the w eig h ted a v e ra g e p rice (in three d e cim a ls) o f a cce p te d com p etitiv e bids f o r the resp ectiv e issues. S ettlem en t fo r a cce p te d tend ers fo r b ills to be m aintained o n the b o o k -e n try re co r d s o f F e d e ra l R e se rv e B an k s and B ra n ch e s m ust be m ade o r co m p le te d at the F e d e ra l R e se rv e B a n k o r B ra n ch on F e b r u a r y 12, 1981, in ca sh o r oth er im m ed iately availa ble funds o r in T re a s u r y bills m a tu rin g F e b ru a ry 12, 1981. H o w e v e r , since the F e d e ra l R e s e r v e B a n k o f N e w Y o r k and its B u ffa lo B ra n ch , the F e d e ra l R e s e rv e B an k o f P hilad elp h ia, and the D e tro it B ra n ch o f the F e d e ra l R e se rv e B a n k o f C h ic a g o w ill be clo se d o n the settlem ent date f o r the n ew issues o f 1 3 -w eek an d 2 6 -w e e k bills, in v e sto rs p u rch a sin g the bills th ro u g h those offices are g iv e n the fo llo w in g p aym en t o p t io n s : 1. P a y m e n t w ith cash , F e d e ra l fu nd s, o th e r im m e d ia te -cre d it item s, o r ch e ck in co lle cte d fo rm , b y W e d n e sd a y , F e b ru a ry 1 1 ; 2. P a y m e n t w ith the m atu red issues o f 13 -w eek and 2 6 -w e e k bills b y F rid a y , F e b r u a r y 1 3 ; 3. P a y m e n t w ith cash, F e d e ra l funds, o r oth e r im m ed ia te-cred it item s b y F rid a y , F e b ru a ry 13, in clu d in g p aym en t fo r one d a y ’ s a ccru e d in t e r e s t ; and 4. P a y m e n t th ro u g h a m em b er co rre sp o n d e n t ba nk in an oth er F e d e ra l R e se rv e D is tr ic t b y T h u rsd a y , F e b r u a r y 12, p ro v id e d the p u rch a ser g iv e s its F e d e ra l R e s e rv e B a n k ad van ce n otice o f the intended p aym en t p rocd u re. C ash ad ju stm en ts w ill be m ade fo r d iffe re n ce s b etw een the par value o f the m a tu rin g bills a cce p te d in e x ch a n g e and the issue p rice o f the n e w bills. U n d e r S e ctio n s 4 5 4 ( b ) and 1 2 2 1 (5 ) o f the In tern al R even u e C o d e o f 1954 the am ou n t o f d isco u n t at w h ich these b ills a re sold is co n sid e re d t o a ccru e w h en the bills a re sold , redeem ed o r o th e r w ise d isp o se d o f, and the b ills are e x c lu d e d fr o m co n sid e ra tio n as cap ital assets. A c c o r d in g ly , the o w n e r o f these b ills (o t h e r than life in su ran ce co m p a n ie s) m ust includ e in his o r her F e d e ra l in co m e ta x return, as o rd in a ry gain o r loss, the d iffe re n ce betw een the p rice paid fo r the b ills, w h eth er o n o rig in a l issue o r on sub sequent p urch ase, and the a m oun t a ctu a lly re ce iv e d eith er up on sale o r red em p tion at m a tu rity d u rin g the ta x a b le y ea r fo r w h ich the retu rn is m ade. D e p a rtm e n t o f the T re a s u r y C ircu la rs, P u b lic D e b t S eries— N o s. 2 6 -7 6 and 27-76, and this n otice, p re s crib e the term s o f these T r e a su ry b ills and g o v e rn the co n d itio n s o f their issue. C o p ie s o f the circu la rs and tend er fo r m s m ay be obtain ed fr o m an y F ed era l R e serv e B a n k o r B ra n ch , o r fr o m the B u rea u o f the P u b lic D ebt. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, February 9, 1981, 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 “ Ten 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 of Treasury bills are shown on the reverse side of this circular. A n t h o n y M. S olo m o n , President. ( over) RESULTS OF L A ST W E E K L Y OFFERING OF T R E A SU R Y BILLS (T W O SERIES TO BE ISSUED F E B R U A R Y 5, 1981) Range of Accepted Competitive Bids 182-Day Treasury Bills Maturing August 6, ip 8i pi-Day Treasury Bills Maturing May 7, ip 8i H ig h ............................... ................. L o w ................................ ................. A verage......................... .................. Price Discount Rate Investment Rate 1 Price Discount Rate Investment Rate 1 96.319a 96.279 96.295 14.562% 14.720% 14.657% 15.33% 15.50% 15.43% 93.122 93.036 93.056 13.605 % 13.775% 13.735% 14.81% 15.01% 14.97% 1 E q u iv a le n t c o u p o n -is s u e y ie ld , a E x c e p t i n g o n e t e n d e r o f $ 2 0 ,00 0. (35 percent of the amount of 91-day bills bid for at the low price was accepted.) (73 percent of the amount of 182-day bills bid for at the low price was accepted.) Total Tenders Received and Accepted By F.R. District (and US. Treasury) 182-Day Treasury Bills Maturing August 6, ip 8i Received Accepted pi-Day Treasury Bills Maturing May 7, ip 8i Accepted Received 80,050,000 7,102,600,000 19,235,000 35,975,000 34,630,000 117,780,000 503,055,000 27,000,000 13,240,000 34,990,000 12,625,000 436,945,000 $ 49,150,000 3,396,600,000 19,235,000 25,975,000 33,130,000 117,070,000 159,155,000 17,500,000 10,240,000 34,990,000 12,625,000 291,560,000 154,645,000 132,995,000 132,995,000 $8,923,790,000 $4,300,345,000 $8,551,120,000 $4,300,225,000 Public Competitive............................ Noncompetitive..................... $6,689,300,000 858,690,000 $2,065,855,000 858,690,000 $5,948,960,000 584,350,000 $1,698,065,000 584,350,000 S u b to t a ls ......................... Federal R eserve......................... Foreign Official Institutions .... $7,547,990,000 800,000,000 575,800,000 $2,924,545,000 800,000,000 575,800,000 $6,533,310,000 679,610,000 1,338,200,000 $2,282,415,000 679,610,000 1,338,200,000 $8,923,790,000 $4,300,345,000 $8,551,120,000 $4,300,225,000 B oston .......................................... New Y o rk ................................... Philadelphia................................ Cleveland..................................... Richmond.................................... A tlan ta......................................... Chicago........................................ St. L o u is...................................... Minneapolis................................ Kansas C ity ................................ D alla s........................................... San F rancisco............................. $ 104,695,000 7,327,115,000 36,940,000 56,045,000 48,135,000 66,265,000 546,345,000 39,150,000 15,705,000 60,155,000 23,050,000 445,545,000 U.S. T reasu ry............................ 154,645,000 T o t a l s ............................... $ 54,095,000 3,386,030,000 36,940,000 46,045,000 47,135,000 65,190,000 168,670,000 28,650,000 9,695,000 60,155,000 23,050,000 220,045,000 $ By class of bidder T o t a l s ........................................