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FEDERAL RESERVE BANK OF NEW YORK F is c a l A g e n t o f th e U n ite d S ta te s Circular No. 9246 February 11, 1982 TREASURY TO AUCTION $5,250 MILLION OF 36U-DAY BILLS To A ll Incorporated B anks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: The Treasury Department today announced its monthly offering of 36U-day "bills, to "be dated February 25, 1982. *pie closing time for receipt of tenders is 1:30 p.m., Thursday, February l 8 , 1982. Because of the close proximity of the auction date, we are printing below only an abbreviated summary of the offering. The full text will be furnished upon request directed to our Government Bond Division. HIGHLIGHTS Amount offered*................................... $5,250 million Issue date........................................ February 25, 1982 Maturity date..................................... February 2 h , 1983 CUSIP designation................................. 91279*+ BZ6 Minimum denomination available.................... $10,000 Deadline for receipt of tenders....................Thursday, Feb. 18 by 1:30 p.m. EST * Federal Reserve Banks, as agents of foreign and international accounts, presently hold $2,176 million, and Federal Reserve Banks for their own account hold $2,988 million, of the maturing bills. Additional amounts may be issued to Federal Reserve Banks as agents for foreign and international monetary authorities. For purposes of determining such additional amounts, foreign and international monetary authorities are considered to hold $96*+ million of the original 52-week issue. A nthony M. S olomon, President. / J o T *•*1 y *v\ a k / fU tn 'T trp O u C f /Oo FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States Offering o f $5,250,000,000 of 364-Day Treasury Bills Dated February 25,1982 Due February 24,1983 Following is the text of a notice issued by the Treasury Department: The Department of the Treasury, by this public notice, invites tenders for approximately $5,250 million, of 364-day Treasury bills to be dated February 25, 1982, and to mature February 24, 1983 (CUSIP No. 912794 BZ6). This issue will not provide new cash for the Treasury, as the maturing 52-week bill was originally issued in the amount of $5,265 million. 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. The bills will be issued for cash and in exchange for Treasury bills maturing February 25, 1982. In addition to the maturing 52-week bills, there are $9,278 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 $2,176 million, and Federal Reserve Banks for their own account hold $2,988 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 accepted 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 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 $964 million of the original 52-week issue. 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. 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 Standard time, Thursday, February 18, 1982. 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 $10,000 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 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 bookentry records of Federal Reserve Banks and Branches must be made or completed at the Federal Reserve Bank or Branch on February 25, 1982, in cash or other immediately available funds or in Treasury bills maturing February 25, 1982. 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 Section 454(b) of the Internal Revenue Code, the amount of 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 of these bills that does not exceed the ratable share of the acquisition discount must be included in the Federal income tax return of the owner as ordinary income. The acquisition discount is the excess of the stated redemption price over the taxpayer’s basis (cost) for the bill. The ratable share of this discount is determined by multiplying such discount by a fraction, the numerator of which is the number of days the taxpayer held the bill and the denominator of which is the number of days from the day following the taxpayer’s date of purchase to the maturity of the bill. If the gain on the sale of a bill exceeds the taxpayer’s ratable portion of the acquisition discount, the excess gain is treated as short-term capital gain. 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 Standard time, Thursday, February 18, 1982 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 fo 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. ANTHONY M. SOLOMON, President. (REF. CIR. NO. 9246]
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