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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States Circular No. 9354 September 1, 1982 OFFERING OF TW O SERIES OF TREASURY BILLS $5,600,000,000 of 91-Day Bills, To Be Issued September 9, 1982, Due December 9, 1982 $5,600,000,000 of 182-Day Bills, To Be Issued September 9, 1982, Due March 10, 1983 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text of 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 $11,200 million, to be issued September 9, 1982. This offering will provide $1,325 million o f new cash for the Treasury, as the maturing bills were originally issued in the amount o f $9,880 million. The two series offered are as follows: 91-day bills (to maturity date) for approximately $5,600 million, representing an additional amount o f bills dated June 10, 1982, and to mature December 9, 1982 (CUSIP No. 912794 BV5), currently outstanding in the amount o f $5,026 million, the additional and original bills to be freely interchangeable. 182-day bills for approximately $5,600 million, to be dated September 9, 1982, and to mature March 10, 1983 (CUSIP No. 912794 CM4). Both series o f bills will be issued for cash and in exchange for Treasury bills maturing September 9, 1982. In addition to the maturing 13-week and 26-week bills, there are $4,768 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 $1,359 million, and Federal Reserve Banks for their own account hold $3,588 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 $1,254 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 Daylight Saving time, Tuesday, September 7, 1982. Form PD 4632-2 (for 26-week series) or Form PD 4632-3 (foi 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 three decimals, e.g., 97.920. 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. A deposit o f 2 percent o f the par amount o f the bills applied for must accompany tenders for such bills from others, unless an express guaranty o f payment by an incorporated bank or trust company accompanies the tenders. 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 September 9, 1982, in cash or other immediately-available funds or in Treasury bills maturing September 9, 1982; provided, however, that settlement for tenders sub mitted to the Federal Reserve Bank o f San Francisco and the Los Angeles Branch must be completed at that bank or branch on September 10, 1982, and must include one day’ s accrued interest if settlement is made with other than Treasury bills maturing September 9, 1982. 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 Daylight Saving time, Tuesday, September 7, 1982, 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 for 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. A n tho ny M. So l o m o n , President C l o s i n g d a t e f o r r e c e i p t o f t e n d e r s is Tuesday, S eptem ber 7, 1982 (OVER) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED SEPTEMBER 2, 1982) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing December 2, 1982 Price 97.839a 97.808 97.825 High ... Low ... Average Discount Rate 8.549% 8.672% 8.604% 182-Day Treasury Bills Maturing March 3, 1983 Investment Rate' Price 95.106 95.057 95.073 8.86% 8.99% 8.92% Discount Rate 9.680% 9.777% 9.746%2 Investment Rate' 10.32 % 10.43% 10.39% 'Equivalent coupon-issue yield. 2The four-week average for calculating the maximum interest rate payable on money market certificates is 9.873% . “Excepting one tender o f $100,000. (86 percent of the amount of 91-day bills bid for at the low price was accepted.) (75 percent of the amount of 182-day bills bid for at the low price was accepted.) Total Tenders Received and Accepted 91-Day Treasury Bills Maturing December 2, 1982 By F.R. District (and U.S. Treasury) Received Boston....................................... $ 53,365,000 New Y o rk ................................. 10,035,240,000 27,870,000 Philadelphia............................. 78,385,000 Cleveland................................. 38,495,000 Richmond................................. 54,650,000 A tlan ta ..................................... 1,093,625,000 Chicago..................................... 44,170,000 St. L ouis................................... 8,615,000 M inneapolis............................. 31,580,000 Kansas City............................... 27,310,000 Dallas ....................................... 750,695,000 San Francisco........................... 219,205,000 U.S. Treasury........................... $12,463,205,000 By class of bidder Public Com petitive..................... $10,273,385,000 839,435,000 Noncompetitive.............. ..................... $11,112,820,000 Federal R eserve....................... 1,083,385,000 267,000,000 Foreign Official Institutions .. $12,463,205,000 T o ta ls ........................................ S ubtotals T o tals ........................................ Accepted 182-Day Treasury Bills Maturing March 3, 1983 $ Received Accepted $ 42,365,000 4,641,340,000 27,870,000 63,385,000 28,495,000 54,550,000 141,395,000 34,670,000 7,615,000 31,580,000 17,310,000 190,695,000 219,205,000 $5,500,475,000 93,965,000 10,069,455,000 119,265,000 139,380,000 47,895,000 66,160,000 1,066,610,000 57,935,000 9,635,000 32,980,000 17,760,000 824,185,000 296,165,000 $12,841,390,000 $ 37,965,000 4,519,635,000 19,265,000 93,380,000 31,395,000 63,360,000 79,610,000 48,935,000 7,635,000 32,980,000 12,760,000 257,910,000 296,165,000 $5,500,995,000 $3,410,655,000 839,435,000 $4,250,090,000 983,385,000 267,000,000 $5,500,475,000 $10,606,110,000 772,880,000 $11,378,990,000 1,050,000,000 412,400,000 $12,841,390,000 $3,365,715,000 772,880,000 $4,138,595,000 950,000,000 412,400,000 $5,500,995,000
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