Full text of Federal Reserve Bank of New York Circulars : 9069. Offering of $4,000,000,000 of 364-Day Treasury Bills

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FEDERAL RESERVE BANK
OF NEW YORK
Fiscal Agent o f the United States
Circular No. 9069
May 8, 1981

O ffe r in g o f $ 4 ,0 0 0 ,0 0 0 ,0 0 0 o f 3 6 4 -D a y T re a s u ry Bills

Dated May 21, 1981

Due May 20, 1982

To Alt Incorporated Banks and Trust Companies, and Others
Concerned, in the Second Federal Reserve District:

Following is the text o f a notice issued today by the Treasury Department:
The Department of the Treasury, by this public notice, invites tenders
for approximately $4,000 million of 364-day Treasury bills to be dated
May 21, 1981, and to mature May 20, 1982 (CUSIP No. 912793 7H3).
This issue will not provide new cash for the Treasury as the maturing
52-week bill was originally issued in the amount of $4,005 million.
The bills will be issued for cash and in exchange for Treasury bills
maturing May 21, 1981. In addition to the maturing 52-week bills, there
are $8,399 million of maturing bills which were originally issued as
13-week and 26-week bills. The disposition of this latter amount will be
announced next week. Federal Reserve Banks as agents for foreign and
international monetary authorities currently hold $2,368 million, and
Federal Reserve Banks for their own account hold $2,528 million of the
maturing bills. These amounts represent the combined holdings of such
accounts for the three regular issues of maturing bills. Tenders from
Federal Reserve Banks for themselves and as agents for foreign and inter­
national monetary authorities will be accepted at the weighted average
price of accepted competitive tenders. Additional amounts of the bills
may be issued to Federal Reserve Banks, as agents for foreign and inter­
national monetary authorities, to the extent that the aggregate amount of
tenders for such accounts exceeds the aggregate amount of maturing bills
held by them. For purposes of determining such additional amounts,
foreign and international monetary authorities are considered to hold
$210 million of the original 52-week issue.
The bills will be issued on a discount basis under competitive and non­
competitive bidding, and at maturity their par amount will be payable
without interest. This 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 Daylight Saving time, Thursday, May 14, 1981. Form PD 4632-1
should be used to submit tenders for bills to be maintained on the bookentry records of the Department of the Treasury.
Each tender must be for a minimum of $10,000. Tenders over $10,(XX)
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 sub­
mit 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 ex­
cess of $200 million. This information should reflect positions held as of

12:30 p.m., Eastern time on the day of the auction. Such positions would
include bills acquired through “ when issued” trading, and futures and
forward transactions. 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 customers, must submit a separate tender for each customer whose net
long position in the bills being offered exceeds $200 million.
Payment for the full par amount of the bills applied for must accom­
pany 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 invest­
ment 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. Competitive 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. Sub­
ject to these reservations, noncompetitive tenders 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.
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 May 21, 1981, in
cash or other immediately available funds or in Treasury bills maturing
May 21, 1981. 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 otherwise 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 income tax return, as ordinary gain or loss, the dif­
ference between the price paid for the bills, whether on original issue or
on subsequent 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 Treasury
bills and govern the conditions of their issue. Copies of the circulars and
tender forms may be obtained from any Federal Reserve Bank or Branch,
or from the Bureau of the Public Debt.

Tenders will be received up to 1:30 p.m ., Eastern Daylight Saving time, Thursday, May 14, 1981, at the Securities
Department o f this Bank’ s Head O ffice, at our B uffalo Branch, or at the Bureau o f 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 o f 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 fo r the Treasury

bills cannot be made by credit through the Treasury Tux 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.