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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States Circular No. 9366 September 24, 1982 Offering of $7,000,000,000 of 364-Day Treasury Bills Due October 6 ,1 9 8 3 Dated October 7, 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 tender for approximately $7,000 million o f 364-day Treasury bills to be dated October 7, 1982, and to mature October 6, 1983 (CUSIP No. 912794 DD3). This issue will provide about $1,750 million new cash for the Treasury, as the maturing 52-week bill was originally issued in the amount o f $5,251 million. The bills will be issued for cash and in exchange for Treasury bills maturing October 7, 1982. In addition to the maturing 52-week bills, there are $10,144 million o f maturing bills which were originally issued as 13-week and 26-week bills. The disposition o f this latter amount will be announced next week. Federal Reserve Banks as agents for foreign and international monetary authorities currently hold $1,401 million, and Federal Reserve Banks For their own account hold S2.978 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 price 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 $439 million o f 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 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, Thursday, September 30, 1982. Form PD 4632-1 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. Dealers who make primary markets in Govern ment 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. 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 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 S500,000 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 competitive bids. 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 October 7, 1982, in cash or other immediately available funds or in Treasury bills maturing October 7, 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 gam 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. Tenders will be received up to 1:30 p.m., Eastern Daylight Saving time, Thursday, September 30, 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 direct ly 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 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, P r e s id e n t.
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