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FEDERAL, [RESERVE BAWK OF NEW YORK F is c a l A g e n t o f th e U n it e d S ta te s Circular No. 9504 June 1, 1983 OFFERING OF TWO SERIES OF TREASURY BILLS $6,200,(M ),© © off 91-Day Bills, To Be Issuied Time 9, 1903, Dee September 8, 1983 M © $6,200,©00,©00 off 182-Day Bills, To Be Isseed June 9, 1983, Dee December 8, 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 of the Treasury, by this public notice, invites tenders for two series of Treasury bills totaling approximately $12,400 million, to be issued June 9, 1983. This offering will provide $350 million of new cash for the Treasury, as the maturing bills are outstanding in the amount of $12,047 million, including $843 million currently held by Federal Reserve Banks as agents for foreign and international monetary authorities and $2,558 million currently held by Federal Reserve Banks for their own account. The two series offered are as follows: 91-day bills (to maturity date) for approximately $6,200 million, representing an additional amount of bills dated September 9, 1982, and to mature September 8, 1983 (CUSIP No. 912794 DC5), currently outstanding in the amount of $13,351 million, the additional and original bills to be freely interchangeable. 182-day bills for approximately $6,200 million, to be dated June 9, 1983, and to mature December 8, 1983 (CUSIP No. 912794 DZ4). Both series of bills will be issued for cash and in exchange for Treasury bills maturing June 9, 1983. Tenders from Federal Reserve Banks for themselves and as agents for foreign and international monetary authorities will be accepted at the weighted average bank discount rates 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. 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 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 Daylight Saving Time, Monday, June 6, 1983. 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 of the Department of the Treasury. Each tender must state the par amount of bills bid for, which must be a minimum of $10,000. Tenders over $10,000 must be in multiples of $5,000. Competitive tenders must also show the yield desired, expressed on a bank discount rate basis with two decimals, e.g., 7.15%. Fractions may not be used. Banking institutions and dealers who make primary markets in Gov ernment securities and report daily to the Federal Reserve Bank of New York their positions in and borrowings on such securities may submit 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 excess 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 forward transactions as well as holdings of 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 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. 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. 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. A deposit of 2 percent of the par amount of the bills applied for must accompany tenders for such bills from others, unless an express guaranty of payment by an incorporated bank or trust company accompanies the tenders. Public announcement will be made by the Department of the Treasury of the amount and yield 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 each issue for $500,000 or less without stated yield from any one bidder will be accepted in full at the weighted average bank discount rate (in two decimals) of accepted competitive bids for the respective issues. The calculation of purchase prices for accepted bids will be carried to three decimal places on the basis of price per hundred, e.g., 99.923, and the determinations of the Secretary of the Treasury shall be final. 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 June 9, 1983, in cash or other immediately-available funds or in Treasury bills maturing June 9, 1983. 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. T h is B a n k w ill r e c e iv e te n d e r s fo r b o t h se r ie s u p t o 1 :3 0 p . m . , E a s te r n D a y lig h t S a v in g T im e , M o n d a y , J u n e 6 ,1 9 8 3 , a t th e S e c u r itie s D e p a r t m e n t o f its H e a d O f f ic e a n d a t its B u f f a l o B r a n c h . R e v is e d te n d e r f o r m s fo r b o t h s e r ie s a r e e n c lo s e d . P le a s e b e su r e t o u s e th e m to s u b m it te n d e r s a n d r e tu r n th e m in th e e n c lo s e d e n v e lo p e . F o r m s f o r s u b m itt in g t e n d e r s d ir e c tly t o th e T r e a s u r y a r e a v a ila b le f r o m th e G o v e r n m e n t B o n d D iv is io n o f th is B a n k . T e n d e r s n o t r e q u ir in g a d e p o s i t m a y b e s u b m i t t e d b y t e l e g r a p h , s u b j e c t t o w r i t t e n c o n f i r m a t i o n ; n o t e n d e r s m a y b e s u b m i t t e d b y t e l e p h o r i e . Pay ment 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. R e s u lt s o f th e la s t w e e k ly o f f e r in g o f T r e a s u r y b ills a r e s h o w n o n th e r e v e r s e s id e o f th is c ir c u la r . ANTHONY M . SOLOMON, President. (OVER) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED JUNE 2, 1983) Range o f Accepted Competitive Bids 91-Day Treasury Bills Maturing September 1, 1983 Low ra te............................................. High r a t e .......................................... Average r a t e .................................... Discount Rate 8.60% 8.66% 8.65% Investment Rate1 8.94% 9.00% 8.99% 182-Day Treasury Bills Maturing December 1, 1983 Discount Rate 8.65% 8.69% 8.67% 2 Price 97.826 97.811 97.813 Investment Rate' 9.20% 9.24% 9.22% Price 95.627 95.607 95.617 'Equivalent coupon-issue yield. 2 The four-week average for calculating the maximum interest rate payable on money market certificates is 8.35%. (83 percent o f the amount o f 91-day bills bid for at the high discount rate was accepted.) (16 percent o f the amount o f 182-day bills bid for at the high discount rate was accepted.) Total Tenders Received and Accepted 91-Day Treasury Bills Maturing September 1, 1983 R e c e iv e d B y F .R . D is tr ic t ( a n d U .S . T rea su ry) B o s to n .......................................... New Y o r k .................................... P h ila d elp h ia ............................... C le v e la n d .................................... R ich m o n d .................................... A t la n t a ........................................ C h ica g o ........................................ St. L o u is ...................................... M in n e a p o lis............................... Kansas C ity ................................. Dallas .......................................... San F ra n cisco ............................. U .S . T reasury............................. T o t a l s ..................................... $ 182-Day Treasury Bills Maturing December 1, 1983 A c c e p te d R e c e iv e d A c c e p te d 134,650,000 11,352,420,000 27,555,000 53,595,000 73,785,000 54,645,000 1,084,200,000 72,335,000 21,870,000 42,410,000 52,385,000 629,675,000 $ 34,650,000 5,004,325,000 27,555,000 33,595,000 52,085,000 54,645,000 264,180,000 45,335,000 16,190,000 42,410,000 43,985,000 362,090,000 $ 194,945,000 13,550,925,000 14,245,000 40,335,000 119,445,000 48,165,000 907,920,000 75,480,000 20,655,000 48,165,000 23,835,000 805,390,000 $ 36,545,000 5,357,720,000 13,745,000 25,335,000 36,445,000 37,665,000 132,600,000 45,440,000 17,135,000 46,665,000 22,835,000 253,890,000 224,005,000 $13,823,530,000 224,005,000 $6,205,050,000 180,885,000 $16,030,390,000 180,885,000 $6,206,905,000 $11,540,330,000 941,415,000 $3,921,850,000 941,415,000 $12,481,745,000 1,318,585,000 23,200,000 $13,823,530,000 $4,863,265,000 1,318,585,000 23,200,000 $6,205,050,000 $13,586,330,000 694,260,000 $14,280,590,000 1,250,000,000 499,800,000 $16,030,390,000 $3,762,845,000 694,260,000 $4,457,105,000 1,250,000,000 499,800,000 $6,206,905,000 B y c la s s o f b id d e r Public C o m p e titiv e ...................... N o n c o m p e titiv e ................ S u b t o t a l s ............................. Federal R e s e r v e ........................ Foreign O fficial Institutions . . T o t a l s .....................................
@FedFRASER