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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent o f the United States Circular No. 9306 June 4, 1982 Offering of $5,500,000,000 o f 364-Day Treasury Bills Dated June 17,1982 Due June 16,1983 T o A l l I n c o r p o r a te d B a n k s a n d T ru st C o m p a n ie s , a n d O th e rs C o n c e rn e d , in th e S e c o n d F e d e ra l R e s e r v e D is tr ic t: Following is the text of a notice issued by the Treasury Department: T h e D e p a r tm e n t o f the T r e a s u r y , b y th is p u b lic notice , in v ite s te n d e rs fo r a p p r o x im a t e ly $ 5 ,5 0 0 m illio n o f 3 6 4 -d a y T r e a s u r y b ills to be d a te d J u n e 17, 1982, a n d to m a tu re J u n e 16, 1983 ( C U S I P N o . 9 1 2 7 9 4 C D 4 ) . T h is issu e w ill p r o v id e a b o u t $ 1 ,5 0 0 m illio n n e w c a s h fo r the T r e a s u r y , as the m a t u r in g 5 2 -w e e k b ill w a s o r ig in a lly issu e d in the a m o u n t o f $4,0 1 1 m illio n . T h e a d d it io n a l issu e s o f 1 6 3 -d a y a n d 1 4 -d a y c a sh m a n a g e m e n t b ills t o t a lin g $ 9 ,0 0 3 m illio n issu e d o n J a n u a r y 5, 1982, a n d J u n e 3, 1982, a n d m a t u r in g J u n e 17, 1982, w ill b e red ee m e d at m a tu rity . T h e b ills w ill be issu e d fo r c a sh a n d in e x c h a n g e f o r T r e a s u r y b ills m a t u r in g J u n e 17, 1982. In a d d it io n to the m a t u r in g 5 2 -w e e k a n d ca sh m a n a g e m e n t b ills, there are $ 9 ,4 5 6 m illio n o f m a t u r in g b ills w h ic h w ere o r ig in a lly issu e d as 13-w e ek a n d 2 6 -w e e k b ills. T h e d is p o s it io n o f th is latter a m o u n t w ill be a n n o u n c e d n ext w eek. F e d e ra l R e s e rv e B a n k s as a g e n ts fo r f o re ig n a n d in te rn a t io n a l m o n e t a ry a u th o r it ie s c u r re n t ly h o ld $ 1 ,6 1 5 m illio n , a n d F e d e ra l R e s e r v e B a n k s f o r th e ir o w n a c c o u n t h o ld $ 3 ,6 7 0 m illio n o f the m a t u r in g b ills. T h e se a m o u n t s re p re se n t the c o m b in e d h o ld in g s o f s u c h a c c o u n t s f o r the three r e g u la r issu e s o f m a t u r in g b ills. T e n d e r s f r o m F e d e ra l R e s e rv e B a n k s fo r th e m se lve s a n d as age n ts f o r fo re ig n a n d in te rn a t io n a l m o n e t a ry a u th o r it ie s w ill be accep ted at the w e ig h te d a v e ra g e p ric e o f accep ted c o m p e titiv e ten de rs. A d d i t i o n a l a m o u n t s o f the b ills m a y be issu e d to F e d e ra l R e s e rv e B a n k s , as a g e n ts fo r fo re ig n a n d in te rn a t io n a l m o n e t a ry a u th o ritie s, to the extent that the a g gre g a te a m o u n t o f te n d e rs fo r s u c h a c c o u n t s excee d s the a g g re g a te a m o u n t o f m a t u r in g b ills h eld b y them . F o r p u r p o s e s o f d e t e r m in in g su c h a d d it io n a l a m o u n t s , fo re ig n a n d in te rn a t io n a l m o n e t a r y a u th o r it ie s are c o n s id e r e d to h o ld $ 85 m illio n o f the o r ig in a l 5 2 -w e e k issue. T h e b ills w ill be is su e d o n a d is c o u n t b a sis u n d e r c o m p e titiv e a n d n o n c o m p e titiv e b id d in g , a n d at m a t u rit y th e ir p a r a m o u n t w ill be p a y a b le w ith o u t interest. T h is series o f b ills w ill be is su e d e n tire ly in b o o k - e n t r y f o 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 ig h e r $ 5 ,0 0 0 m u ltip le , o n the re c o rd s eith er o f the F e d e ra l R e s e rv e B a n k s a n d B r a n c h e s , o r o f the D e p a r tm e n t o f the T re a s u r y . T e n d e r s w ill be received at F e d e ra l R e se rv e B a n k s a n d B r a n c h e s a n d at the B u r e a u o f the P u b lic D e b t, W a s h in g t o n , D . C . 2 0 2 2 6 , u p to 1 :30 p .m ., E a s te r n D a y lig h t S a v in g tim e, T h u r s d a y , J u n e 10, 1982. F o r m P D 463 2 -1 s h o u ld be u se d to s u b m it te n d e rs fo r b ills to be m a in t a in e d o n the b o o k e n try re c o rd s o f the D e p a r tm e n t o f the T r e a s u r y . E a c h ten de r m u s t be fo r a m in im u m o f $ 1 0 ,0 0 0 . T e n d e r s o v e r $ 1 0 ,0 0 0 m u st be in m u ltip le s o f $ 5 ,0 0 0 . In the case o f c o m p e titiv e ten de rs, the p rice o ffe re d m u st be e x p re sse d o n the b a sis o f 100, w ith three d e c im a ls, e.g., 9 7 .9 2 0 . F r a c t io n s m a y n o t be u se d . B a n k in g in st it u t io n s a n d d e a le rs w h o m a k e p r im a r y m a rk e t s in G o v e r n m e n t se cu ritie s a n d re p o rt d a ily to the F e d e ra l R e s e rv e B a n k o f N e w Y o r k th e ir p o s it io n s in a n d b o r r o w in g s o n s u c h se cu ritie s m a y s u b m it te n d e rs fo r a c c o u n t o f c u s to m e rs , if the n a m e s o f the c u s to m e rs a n d the a m o u n t fo r each c u s to m e r are fu r n is h e d . O t h e r s are o n ly p e rm itte d to s u b m it ten de rs fo r the ir o w n a c c o u n t. E a c h te n d e r m u s t state the a m o u n t o f a n y net lo n g p o s it io n in the b ills b e in g o ffe re d i f s u c h p o s it io n is in e x cess o f $ 2 0 0 m illio n . T h is in f o r m a t io n s h o u ld reflect p o s it io n s h e ld a s o f 1 2 :30 p .m ., E a s te r n tim e o n the d a y o f the a u c t io n . S u c h p o s it io n s w o u ld in c lu d e b ills a c q u ir e d t h r o u g h “ w h e n is s u e d ” t ra d in g , a n d fu tu re s a n d f o r w a r d t ra n sa c tio n s. D e a le r s w h o m a k e p r im a r y m a rk e t s in G o v e r n m e n t se cu ritie s a n d r e p o rt d a ily to the F e d e ra l R e s e r v e B a n k o f N e w Y o r k th e ir p o s it io n s in a n d b o r r o w in g s o n su c h se cu rities, w h e n s u b m it t in g te n d e rs f o r c u s to m e rs , m u s t s u b m it a se p a ra te te n d e r fo r e a c h c u s to m e r w h o s e net lo n g p o s it io n in the b ills b e in g o ffe re d exceed s $ 2 0 0 m illio n . P a y m e n t f o r the fu ll p a r a m o u n t o f the b ills a p p lie d fo r m u s t a c c o m p a n y a ll te n d e rs s u b m itt e d fo r b ills to be m a in t a in e d o n the b o o k - e n t r y r e c o r d s o f the D e p a r t m e n t o f the T r e a s u r y . A c a sh a d ju s t m e n t w ill be m a d e o n all a ccep ted te n d e rs f o r the d iffe re n c e b etw e en the p a r p a y m e n t s u b m itt e d a n d the a c tu a l issu e p ric e a s d e te rm in e d in the a u c tio n . N o d e p o sit need a c c o m p a n y te n d e rs f r o m in c o r p o r a t e d b a n k s a n d tru st c o m p a n ie s a n d f r o m re s p o n s ib le a n d re c o g n iz e d d e a le rs in in v e s t m e n t se cu ritie s f o r b ills to be m a in t a in e d o n the b o o k - e n t r y r e c o r d s o f F e d e ra l R e s e rv e B a n k s a n d B r a n c h e s. A d e p o sit o f 2 p erce nt o f the p a r a m o u n t o f the b ills a p p lie d fo r m u s t a c c o m p a n y te n d e rs f o r s u c h b ills f r o m o th e rs, u n le ss a n e x p re ss g u a r a n t y o f p a y m e n t b y a n in c o r p o r a t e d b a n k o r tru st c o m p a n y a c c o m p a n ie s the tenders. P u b lic a n n o u n c e m e n t w ill be m a d e b y the D e p a r t m e n t o f the T r e a s u r y o f the a m o u n t a n d p rice r a n g e o f accep ted b id s. C o m p e t it iv e b id d e r s w ill be a d v ise d o f the a cc e p ta n c e o r re je ctio n o f th e ir ten de rs. T h e S e c re ta ry o f the T r e a s u r y e x p r e ss ly rese rv e s the rig h t to a ccep t o r reject a n y o r all ten d e rs, in w h o le o r in pa rt, a n d the S e c re ta r y ’s a c t io n s h a ll b e fin a l. S u b ject to these r e s e rv a tio n s , n o n c o m p e t it iv e te n d e rs f o r $ 5 0 0 ,0 0 0 o r less w ith o u t stated p rice f r o m a n y o n e b id d e r w ill be a ccep ted in fu ll at the w e ig h te d a v e ra g e p ric e (in three d e c im a ls) o f a ccep ted c o m p e titiv e b id s. S e ttle m e n t f o r a ccep ted te n d e rs fo r b ills to b e m a in t a in e d o n the b o o k e n try r e c o r d s o f F e d e ra l R e se rv e B a n k s a n d B r a n c h e s m u s t be m a d e o r c o m p le te d at the F e d e ra l R e s e rv e B a n k o r B r a n c h o n J u n e 17, 1982, in c a sh o r o t h e r im m e d ia t e ly a v a ila b le f u n d s o r in T r e a s u r y b ills m a t u r in g J u n e 17, 1982. C a s h a d ju s t m e n t s w ill be m a d e fo r d iffe re n c e s b etw e en the p a r v a lu e o f the m a t u r in g b ills accep ted in e x c h a n g e a n d the is su e p ric e o f the n e w b ills. U n d e r S e c t io n 4 5 4 (b ) o f the In t e r n a l R e v e n u e C o d e , the a m o u n t o f d is c o u n t at w h ic h these b ills a re s o ld is c o n s id e r e d to a c c ru e w h e n the b ills a re s o ld , red ee m e d , o r o th e rw is e d is p o s e d o f. S e c tio n 1 2 3 2 (a )(4 ) p r o v id e s tha t a n y g a in o n the sale o r re d e m p tio n o f these b ills that d o e s n o t exceed the ra ta b le s h a r e o f the a c q u is it io n d is c o u n t m u s t be in c lu d e d in the F e d e ra l in c o m e ta x re tu rn o f the o w n e r a s o r d in a r y in c o m e . T h e a c q u is it io n d is c o u n t is the excess o f the stated r e d e m p tio n p ric e o v e r the t a x p a y e r ’s b a sis (c o st) fo r the bill. T h e ra ta b le s h a r e o f th is d is c o u n t is d e te rm in e d b y m u lt ip ly in g su c h d is c o u n t b y a fr a c t io n , the n u m e r a t o r o f w h ic h is the n u m b e r o f d a y s the t a x p a y e r h eld the b ill a n d the d e n o m in a t o r o f w h ic h is the n u m b e r o f d a y s f r o m the d a y f o llo w in g the t a x p a y e r ’s d a te o f p u r c h a s e to the m a tu rity o f the b ill. I f the g a in o n the sa le o f a b ill excee d s the t a x p a y e r ’s ra ta b le p o r t io n o f the a c q u is it io n d is c o u n t, the excess g a in is treated as s h o rt -te rm c a p ita l g a in . D e p a r tm e n t o f the T r e a s u r y C ir c u la r s , P u b lic D e b t S e r ie s — N o s . 2 6 -7 6 a n d 2 7 -7 6 , a n d th is notice , p re sc rib e the te rm s o f these T r e a s u r y b ills a n d g o v e r n the c o n d it io n s o f th e ir issu e. C o p ie s o f the c irc u la rs a n d te n d e r f o r m s m a y be o b t a in e d f r o m a n y F e d e ra l R e s e rv e B a n k o r B r a n c h , o r f r o m the B u r e a u o f the P u b l ic D e b t. Tenders will be received up to 1:30 p.m ., Eastern Daylight Saving time, Thursday, June 10, 1982 at the Securities Department o f this Bank’s Head O ffice, at our Buffalo 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. P a y m e n t f o r th e T r e a s u r y b ills c a n n o t b e m a d e b y c r e d it th r o u g h th e T r e a s u r y T a x a n d L o a n A c c o u n t . S e ttle m e n t m u s t b e m a d e in c a sh o r o th e r im m e d ia te ly a v a ila b le f u n d s o r in T r e a s u r y s e c u r itie s m a tu r in g o n o r b e fo r e th e issu e d a te . ANTHONY M. SOLOMON, P r e s id e n t. m
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