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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States Circular No. 9103 July 2, 1981 O ffering o f $4,000,000,000 of 364-D ay Treasury Bills Dated July 16,1981 Due July 15,1982 To A ll 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 D epartm ent: The Department of the Treasury, by this public notice, invites tenders for approximately $4,000 million, of 364-day Treasury bills to be dated July 16, 1981, and to mature July 15, 1982 (CUSIP No. 912794 AW 4). 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 July 16, 1981. In addition to the maturing 52-week bills, there are $8,372 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 $2,107 million, and Federal Reserve Banks for their own account hold $2,517 million of the maturing bills. These amounts represent the combined holdings of such accounts for the three issues of maturing bills. Tenders from Federal Reserve Banks for themselves and as agents for foreign and international monetary authorities will be accepted at the weighted average price of ac cepted competitive tenders. Additional amounts of the bills may be issued to Federal Reserve Banks, as agents for foreign and international monetary authorities, to the extent that the aggregate amount o f 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 $233 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 o f the Public Debt, Washington, D.C. 20226, up to 1:30 p.m., Eastern Daylight Saving time, Thursday, July 9, 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 o f $10,000. Tenders over $10,000 must be in multiples o f S5.000. 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 o f any net long position in the bills being offered if such position is in ex cess o f $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 o f 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 o f the acceptance or rejection of their tenders. The Secretary o f 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 bookentry records of Federal Reserve Banks and Branches must be made or completed at the Federal Reserve Bank or Branch on July 16, 1981, in cash or other immediately available funds or in Treasury bills maturing July 16, 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, July 9, 1981, at the Securities nenamnem of this Bank's Head Office, at our Buffalo Branch, or at the Bureau of the Public Debt. The enclosed form hoiild be used for submitting tenders through a financial institution. Forms for submitting tenders directly to the T surv are available from the Government Bond Division of this Bank. Tenders not requiring a deposit may be submit. r,e hv .ele2raDh subject to written confirmation; no tenders may be submitted by telephone. Payment fo r the Treasury r j. I* bemade by credit through the Treasury Tax and Loan Account. Settlement must be made in cash or other immediatelyavailable funds or in Treasury securities maturing on or before the issue date. Anthony M. Solomon , President.