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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States Circular No. 9017 February 13, 1981 Offering of $4,500,000,000 of 364-Day Treasury Bills Dated February 26,1981 Due February 25,1982 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text of a notice issued today by the Treasury Department: T h e D e p a rtm e n t o f the T re a su ry , b y this p u b lic n o t ic e , invites tend ers f o r a p p r o x im a t e ly $ 4 ,5 0 0 m illio n o f 3 6 4 -d a y T re a su ry bills to b e d ated F e b r u a r y 2 6 , 1981, a n d t o m a tu re F e b ru a ry 2 5 , 1982 (C U S I P N o . 912793 8 G 4 ]. T h is issue w ill p r o v id e a b o u t $ 5 0 0 m illio n n ew ca sh f o r the T re a s u ry as the m a tu rin g 5 2 -w eek bill w as o rig in a lly issu ed in the a m o u n t o f $ 4 ,0 2 0 m illio n . T h e b ills w ill b e issu ed fo r ca sh a n d in e x c h a n g e fo r T rea su ry bills m a tu rin g F e b ru a ry 2 6 , 1981. In a d d itio n to the m a tu rin g 5 2 -w e e k bills, th ere are $ 7 ,9 6 6 m illio n o f m a tu rin g bills w h ic h w ere o r ig in a lly issu ed as 1 3 -w e e k a n d 2 6 -w e e k b ills. T h e d is p o s itio n o f this latter a m o u n t w ill b e a n n o u n c e d next w eek . F ed era l R eserv e B an ks as a gen ts fo r fo r e ig n an d in te rn a tio n a l m o n e ta r y a u th orities cu rren tly h o ld $ 2 ,2 1 6 m illio n , an d F e d e ra l R eserv e B an ks fo r their o w n a c c o u n t h o ld $ 2 ,9 9 5 m illio n o f the m a tu rin g b ills. T h ese a m o u n ts rep resen t the c o m b in e d h o ld in g s o f su ch a c c o u n ts f o r the three issues o f m a tu rin g bills. T e n d e rs fr o m F ed era l R e se rv e B an k s fo r th em selves a n d as agen ts fo r fo r e ig n a n d in tern a tio n a l m o n e ta r y a u th orities w ill b e a cc e p te d at the w e ig h te d a v era g e p rice o f a c c e p te d c o m p e t it iv e ten d ers. A d d it io n a l a m o u n ts o f the bills m a y b e issued t o F e d e ra l R eserv e B a n k s, as a gen ts f o r fo r e ig n a n d in tern a tio n a l m o n e ta r y a u th o ritie s, to the exten t that the a g g reg a te a m o u n t o f tenders f o r su ch a c c o u n ts e x ceed s the a g g rega te a m o u n t o f m a tu rin g bills h eld b y th e m . F o r p u r p o s e s o f d eterm in in g su ch a d d itio n a l a m o u n ts , fo r e ig n an d in te rn a tio n a l m o n e ta r y a u th orities are c o n s id e r e d t o h o ld $228 m illio n o f the o r ig in a l 5 2 -w eek issue. T h e bills w ill b e issu ed o n a d is co u n t ba sis u n d er c o m p e t it iv e a n d n o n c o m p e t it iv e b id d in g , a n d at m a tu rity their p ar a m o u n t w ill b e p a y a b le w ith o u t interest. T h is series o f bills w ill b e issu ed en tirely in b o o k - e n t r y fo 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 igh er $ 5 ,0 0 0 m u ltip le , o n the r e c o r d s either o f the F ed era l R eserv e B an k s a n d B ra n ch e s, o r o f the D e p a rtm e n t o f the T rea su ry . T e n d e rs w ill b e receiv ed at F ed era l R eserv e B an ks an d B ra n ch es a n d at the B u rea u o f the P u b lic D e b t, W a s h in g to n , D .C . 2 0 2 2 6 , u p to 1:30 p .m ., E astern S ta n d a rd tim e, T h u rs d a y , F eb ru a ry 19, 1981. F o rm P D 4632-1 s h o u ld b e u sed t o su b m it tend ers fo r bills t o b e m a in ta in ed o n the b o o k en try r e co r d s o f the D ep a rtm en t o f the T rea su ry . E a ch ten d er m ust b e fo r a m in im u m m u st b e in m u ltip les o f $ 5 ,0 0 0 . In the p ric e o f f e r e d m ust b e exp ressed o n the th ree d e cim a ls , e .g ., 9 9 .9 2 5 . F ra ctio n s o f $ 1 0 ,0 0 0 . T en d ers o v e r $ 1 0 ,0 0 0 ca se o f c o m p e t it iv e ten d ers, the ba sis o f 100, w ith n o t m o r e than m a y n o t b e u sed. B a n k in g in stitu tion s a n d d ealers w h o m a k e p rim a ry m arkets in G o v e r n m e n t secu rities a n d r e p o rt d a ily to the F ed era l R eserv e B an k o f N e w Y o r k their p o s itio n s in a n d b o r r o w in g s o n su ch securities m a y s u b m it ten d ers f o r a c c o u n t o f cu s to m e r s , i f the n a m es o f the c u sto m e rs an d the a m o u n t fo r e a ch c u s to m e r are fu rn ish ed . O th ers are o n ly p erm itte d to s u b m it ten d ers fo r their o w n a c c o u n t. E a ch ten d er m ust state the a m o u n t o f a n y net lo n g p o s itio n in the bills b ein g o ff e r e d i f su ch p o s itio n is in e x cess o f $ 2 0 0 m illio n . T h is in fo r m a t io n s h o u ld r e fle ct p o s itio n s h eld as o f 12 :30 p .m ., E astern tim e o n the d a y o f the a u ctio n . S u ch p o s itio n s w o u ld in clu d e bills a c q u ire d th ro u g h “ w h en issu e d ’ ’ tra d in g, a n d fu tu res and fo r w a r d tra n sa ctio n s. D ealers w h o m a k e p rim a ry m arkets in G o v e r n m e n t secu rities a n d re p o r t d a ily to the F ed era l R eserv e B an k o f N ew Y o r k their p o s itio n s in a n d b o r r o w in g s o n su ch secu rities, w h en su b m ittin g tenders f o r cu s to m e r s , m ust su b m it a sep arate ten d er f o r e a ch cu s to m e r w h o s e net lo n g p o s itio n in the bills b e in g o ff e r e d e x ce e d s $ 2 0 0 m illio n . P a y m e n t f o r the fu ll p ar a m o u n t o f the bills a p p lie d f o r m ust a c c o m p a n y all tend ers su b m itte d f o r bills 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 co r d s o f the D e p a rtm e n t o f the T re a su ry . A ca sh a d ju stm e n t w ill be m a d e o n all a cc e p te d tend ers f o r the d iffe r e n c e b e tw e e n the p ar p a ym en t su b m itte d a n d the a ctu a l issue p rice as d e te rm in e d in the a u ctio n . N o d e p o s it need a c c o m p a n y tend ers fr o m in c o r p o r a t e d ba n k s an d trust c o m p a n ie s a n d fr o m re sp o n sib le a n d r e co g n iz e d d ealers in invest m ent securities f o r bills t o b e m a in ta in ed o n the b o o k -e n t r y r e co rd s o f F ed era l R eserv e B an ks a n d B ran ch es. P u b lic a n n o u n c e m e n t w ill b e m a d e b y the D e p a rtm e n t o f the T rea su ry o f the a m o u n t a n d p rice range o f a c ce p te d b id s. C o m p e titiv e b id d e rs will b e a d v ise d o f the a c c e p ta n ce o r r e je c tio n o f their tend ers. T h e S ecretary o f the T re a su ry e x p re ssly reserves the righ t t o a cc e p t o r re je ct a n y o r all ten d ers, in w h o le o r in p art, a n d the S e cre ta ry ’ s a c tio n shall b e fin a l. S u b je c t to these re se rva tio n s, n o n c o m p e tit iv e tend ers f o r $ 5 0 0 ,0 0 0 o r less w ith o u t stated p rice fr o m a n y o n e b id d e r w ill b e a cc e p te d in fu ll at the w e ig h te d a v e ra g e p rice (in three d e cim a ls) o f a cc e p te d c o m p e titiv e b id s. S ettlem en t f o r a cc e p te d tend ers f o r bills to b e m a in ta in ed o n the b o o k entry re co r d s o f F ed era l R eserve B an ks a n d B ra n ch es m ust b e m a d e o r c o m p le te d at the F ed era l R eserv e B an k o r B ra n ch o n F e b ru a ry 2 6 , 1981, in cash o r o th e r im m e d ia te ly a v a ila b le fu n d s o r in T re a su ry bills m atu ring F e b ru a ry 2 6 , 1981. C a sh a d ju stm e n ts w ill b e m a d e f o r d iffe r e n c e s b e tw e e n the p ar valu e o f m a tu rin g bills a cc e p te d in e x ch a n g e a n d the issue p rice o f the new bills. U n d e r S e ctio n s 4 5 4 (b ) an d 12 21(5 ) o f the Internal R e v e n u e C o d e o f 1954 the a m o u n t o f d is co u n t at w h ich these bills are s o ld is co n s id e r e d to a ccru e w h en the bills are s o ld , re d e e m e d o r o th e rw ise d is p o s e d o f , a n d the bills are e x c lu d e d fr o m c o n s id e r a tio n as ca p ita l assets. A c c o r d in g ly , the o w n e r o f these bills (o th e r than life in su ra n ce c o m p a n ie s ) m ust in clu d e in his o r her F ed era l in c o m e tax retu rn , as o r d in a r y g a in o r loss, the d i f fe re n ce b e tw e e n the p rice p a id f o r the b ills, w h eth er o n o rig in a l issue o r o n su b seq u en t p u rch a se , an d the a m o u n t a ctu a lly re ce iv e d either u p o n sale o r re d e m p tio n at m a tu rity d u rin g the ta x a b le year f o r w h ich the retu rn is m a d e . D e p a rtm e n t o f the T re a su ry C ircu la rs, P u b lic D e b t S eries— N o s . 2 6 -7 6 a n d 2 7 -7 6 , a n d this n o tic e , p re s crib e the term s o f these T re a su ry bills a n d g o v e rn the c o n d itio n s o f their issue. C o p ie s o f the circu la rs an d ten d er fo r m s m a y b e o b ta in e d fr o m an y F ed era l R eserve Bank o r B ra n ch , o r fr o m the B ureau o f the P u b lic D e b t. Tenders will be received up to 1:30 p.m ., Eastern Standard time, Thursday, February 19, 1981, at the Securities Department of 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. AN TH ON Y M . SOLOM ON, President.
@FedFRASER