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" FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States Circular N o. 9195 November 25, 1981 OFFERING OF TW O SERIES OF TREASURY BILLS $4,700,000,000 of 91-Day Bills, To Be Issued December 3, 1981, Due March 4, 1982 $4,700,000,000 of 182-Day Bills, To Be Issued December 3, 1981, Due June 3, 1982 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text o f a notice issued by the Treasury Department: The Department o f the Treasury, by this public notice, invites tenders for two series o f Treasury bills totaling approximately $9,400 million, to be issued December 3, 1981. This offering will provide $800 million o f new cash for the Treasury, as the maturing bills were originally issued in the amount o f $8,604 million. The two series offered are as follows: 91-day bills (to maturity date) for approximately $4,700 million, representing an additional amount o f bills dated September 3, 1981, and to mature March 4, 1982 (CUSIP No. 912794 AG9), currently outstanding in the amount o f $4,565 million, the additional and original bills to be freely interchangeable. 182-day bills for approximately $4,700 million, to be dated December 3, 1981, and to mature June 3, 1982 (CUSIP No. 912794 AS3). Both series o f bills will be issued for cash and in exchange for Treasury bills maturing December 3, 1981. In addition to the maturing 13-week and 26-week bills, there are $4,513 million o f maturing 52-week bills. The disposition o f this latter amount was announced last week. Federal Reserve Banks, as agents for foreign and international monetary authorities, currently hold $1,685 million, and Federal Reserve Banks for their own account hold $3,370 million o f the maturing bills. These amounts represent the combined holdings o f such accounts for the three issues o f 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 prices o f accepted competitive tenders. Additional amounts o f 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 o f maturing bills held by them. For purposes o f determining such additional amounts, foreign and international monetary authorities are considered to hold $1,495 million o f the original 13-week and 26-week issues. 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. Both series o f bills will be issued entirely in book-entry form in a minimum amount o f $10,000 and in any higher $5,000 multiple, on the records either o f the Federal Reserve Banks and Branches, or o f the Department o f 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 Standard time, Monday, November 30, 1981. Form PD 4632-2 (for 26-week series) or Form PD 4632-3 (for 13-week series) should be used to submit tenders for bills to be maintained on the book-entry records o f the Department o f the Treasury. Each tender must be for a minimum o f $10,000. Tenders over $10,000 must be in multiples o f $5,000. In the case o f competitive tenders, the price offered must be expressed on the basis o f 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 o f New York their positions in and borrowings on such securities may sub mit tenders for account o f customers, if the names o f 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 excess o f $200 million. This information should reflect positions held as o f 12:30 p.m ., Eastern time, on the day o f the auction. Such positions would include bills acquired through “ when issued” trading, and futures and forward transactions as well as holdings o f outstanding bills with the same maturity date as the new offering, e.g., bills with three months to maturity previously offered as six-month bills. Dealers who make primary markets in Government securities and report daily to the Federal Reserve Bank o f 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 o f the Department o f 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. N o 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 o f Federal Reserve Banks and Branches. Public announcement will be made by the Department o f the Treasury o f the amount and price range o f accepted bids. Competitive bidders will be advised o f the acceptance or rejection o f 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 each issue 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) o f accepted com petitive bids for the respective issues. Settlement for accepted tenders for bills to be maintained on the bookentry records o f Federal Reserve Banks and Branches must be made or completed at the Federal Reserve Bank or Branch on December 3, 1981, in cash or other immediately available funds or in Treasury bills maturing December 3, 1981. Cash adjustments will be made for differences between the par value o f the maturing bills accepted in exchange and the issue price o f the new bills. Under Section 454(b) o f the Internal Revenue Code, the amount o f discount at which these bills are sold is considered to accrue when the bills are sold, redeemed, or otherwise disposed of. Section 1232(a)(4) provides that any gain on the sale or redemption o f these bills that does not exceed the ratable share o f the acquisition discount must be included in the Federal income tax return o f the owner as ordinary income. The acquisition discount is the excess o f the stated redemption price over the taxpayer’ s basis (cost) for the bill. The ratable share o f this discount is determined by multiplying such discount by a fraction, the numerator o f which is the number o f days the taxpayer held the bill and the denominator o f which is the number o f days from the day following the taxpayer’ s date o f purchase to the maturity o f the bill. If the gain on the sale o f a bill exceeds the taxpayer’ s ratable portion o f the acquisition discount, the excess gain is treated as short-term capital gain. Department o f the Treasury Circulars, Public Debt Series— Nos. 26-76 and 27-76, and this notice, prescribe the terms o f these Treasury bills and govern the conditions o f their issue. Copies o f the circulars and tender forms may be obtained from any Federal Reserve Bank or Branch, or from the Bureau o f the Public Debt. This Bank will receive tenders for both series up to 1:30 p.m., Eastern Standard time, Monday, November 30, 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 “ Tender 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 fo r 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. ANTHONY M. So l o m o n , President. (ni_ D 1 it ) V h R 1 . RESULTS OF LAST W EEKLY OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED NOVEMBER 27, 1981) Range of Accepted Competitive Bids 90-Day Treasury Bills Maturing February 25, 1982 Price High . . . Low . . . Average 97.388a 97.351 97.360 181-Day Treasury Bills Maturing May 27, 1982 Discount Rate Investment Rate' Price Discount Rate Investment Rate' 10.448% 10.596% 10.560% 10.88% 11.04% 11.00% 94.570 94.481 94.512 10.800% 10.977% 10.915 % 2 11.58% 11.78% 11.71% ‘ Equivalent coupon-issue yield. 2 The four-week average for calculating the maximum interest rate payable on money market certificates is 11.529%. “Excepting two tenders totaling $2,925,000. (37 percent o f the amount o f 90-day bills bid for at the low price was accepted.) (99 percent o f the amount o f 181-day bills bid for at the low price was accepted.) Total Tenders Received and Accepted 90-Day Treasury Bills Maturing February 25, 1982 By F.R. District (and U.S. Treasury) Received Accepted 181-Day Treasury Bills Maturing May 27, 1982 Received Accepted Boston..................................... New Y o r k ............................... Philadelphia........................... Cleveland............................... Richmond............................... A tlanta................................... Chicago................................... St. L ou is................................. Minneapolis........................... Kansas City............................. Dallas ..................................... San Francisco......................... $ 41,645,000 8,702,025,000 32,265,000 54,120,000 28,905,000 44,315,000 868,800,000 19,165,000 7,975,000 30,225,000 23,450,000 756,235,000 $ 41,645,000 3,887,025,000 31,625,000 44,120,000 28,405,000 44,315,000 298,800,000 17,165,000 2,975,000 30,225,000 18,450,000 56,235,000 $ 42,495,000 6,528,695,000 16,545,000 68,225,000 33,005,000 22,760,000 609,225,000 15,425,000 8,470,000 31,405,000 13,140,000 1,047,380,000 $ 28,495,000 3,442,945,000 16,545,000 65,225,000 23,005,000 22,760,000 164,225,000 13,425,000 3,470,000 31,405,000 8,140,000 722,380,000 U.S. Treasury......................... 203,955,000 203,955,000 158,425,000 158,425,000 T o t a l s .................................. $10,813,080,000 $4,704,940,000 $8,595,195,000 $4,700,445,000 $8,782,135,000 797,955,000 $2,673,995,000 797,955,000 $6,213,065,000 493,230,000 $2,318,315,000 493,230,000 $9,580,090,000 1,049,990,000 183,000,000 $3,471,950,000 1,049,990,000 183,000,000 $6,706,295,000 850,000,000 1,038,900,000 $2,811,545,000 850,000,000 1,038,900,000 $10,813,080,000 $4,704,940,000 $8,595,195,000 $4,700,445,000 By class o f bidder Public Competitive................... Noncompetitive............. S u b t o t a l s ........................... Federal Reserve..................... Foreign Official Institutions .. T o t a l s .................................. MAILING LIST NOTICE To the Addressee: Effective with the next weekly Treasury bill announcement, we will implement a new computerized mailing list system. The label that will be used to mail next weekTs offering will have been generated by that automated system. Although we have taken care to transfer your current address to the computer data base, errors can occur in making that transfer. Therefore, we will be asking you to review the new address label and advise us of any needed corrections. Circulars Division FEDERAL RESERVE BANK OF NEW YORK
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