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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States Circular No. 9525 July 13, 1983 OFFERING OF TWO SERIES OF TREASURY BILLS $6,200,000,000 of 91-Day Bills, To Be Issued July 21, 1983, Due October 20, 1983 $6,200,000,000 o f 182-Day Bills, To Be Issued July 21, 1983, Due January 19, 1984 To A ll 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 of the Treasury, by this public notice, invites tenders for two series o f Treasury bills totaling approximately $12,400 million, to be issued July 21, 1983. This offering will provide $175 million o f new cash for the Treasury, as the maturing bills are outstanding in the amount o f $12,223 million, including $1,651 million currently held by Federal Reserve Banks as agents for foreign and international monetary authorities and $1,608 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 o f bills dated April 21, 1983, and to mature October 20, 1983 (CUSIP No. 912794 DU5), currently outstanding in the amount o f $6,246 million, the additional and original bills to be freely interchangeable. 182-day bills for approximately $6,200 million, to be dated July 21, 1983, and to mature January 19, 1984 (CUSIP No. 912794 EL4). Both series o f bills will be issued for cash and in exchange for Treasury bills maturing July 21, 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 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 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 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 of 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, Monday, July 18, 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 fnaintained on the book-entry records o f the Department o f the Treasury. Each tender must state the par amount o f bills bid for, which must be a minimum o f $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 o f New York their positions in and borrowings on such securities may submit 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 of 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. 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 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 of 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 yield 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 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 o f price per hundred, e.g., 99.923, and the determinations o f the Secretary o f the Treasury shall be final. 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 July 21, 1983, in cash or other immediately-available funds or in Treasury bills maturing July 21, 1983. Cash adjustments will be made for differences between the par value o f the maturing bills accepted in exchange and the issue price of the new bills. Under Section 454(b) o f 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 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, Monday, July 18, 1983, at the Securities Department of its Head Office and at its Buffalo Branch. Tender forms for both series are enclosed. Please be sure to use them to submit tenders and return them in the enclosed envelope. 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. P a y m e n t f o r T reasury bills c a n n o t b e m a d e b y c re d it th rou gh th e T reasury T ax a n d L o a n A c c o u n t. S e ttle m e n t m u st b e m a d e in cash o r o th e r im m e d ia te ly a va ila b le f u n d s o r in T reasury secu rities m a tu rin g on o r b e fo re the issue d ate. Results of the last weekly offering of Treasury bills are shown on the reverse side of this circular. ANTHONY M. SOLOMON, President. (OVER) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED JULY 14, 1983) Range of Accepted Competitive Bids 9 1 -D a y T reasury B ills M a tu rin g O c to b e r 13, 1983 Discount Rate Low rate....................................... High r a t e ..................................... Average r a t e ............................... Investment Rate' 9.03% 9.08% 9.07% 9.40% 9.45% 9.44% 1 82-D ay T reasu ry B ills M a tu rin g J a n u a ry 12, 1984 Price Discount Rate 97.717 97.705 97.707 Investment Rate' 9.23% 9.27% 9.26%* 2 Price 9.84% 9.89% 9.88% 95.334 95.314 95.319 'Equivalent coupon-issue yield. 2The four-week average for calculating the maximum interest rate payable on money market certificates is 9.15%. (69 percent of the amount of 91-day bills bid for at the high discount rate was accepted.) (74 percent of the amount of 182-day bills bid for at the high discount rate was accepted.) Total Tenders Received and Accepted 9 1 -D a y T reasury B ills M a tu rin g O c to b e r 13, 1983 Received By F.R. District (and U.S. Treasury) Boston..................................... New Y o rk ............................... Philadelphia........................... Cleveland ............................... Richmond............................... A tla n ta ................................... Chicago................................... St. L o u is................................. M inneapolis........................... Kansas C ity............................. Dallas ..................................... San Francisco......................... 18 2 -D a y T reasu ry B ills M a tu rin g J a n u a ry 12, 1984 Received Accepted $ 151,445,000 13,883,830,000 26,065,000 75,595,000 134,960,000 92,675,000 1,150,475,000 68,795,000 20,765,000 64,740,000 19,095,000 1,082,840,000 Accepted $ 51,445,000 4,940,540,000 26,065,000 47,840,000 74,020,000 46,195,000 220,840,000 45,275,000 19,190,000 64,740,000 19,095,000 282,500,000 149,750,000 10,347,670,000 136,460,000 72,415,000 66,200,000 67,105,000 1,152,915,000 80,115,000 23,910,000 47,455,000 24,960,000 1,162,020,000 $ 69,600,000 4,320,965,000 78,710,000 41,415,000 59,150,000 60,700,000 377,635,000 53,855,000 23,910,000 47,455,000 24,960,000 742,240,000 308,880,000 308,880,000 370,745,000 370,745,000 $13,639,855,000 $6,209,475,000 $17,142,025,000 $6,208,490,000 $11,053,540,000 1,113,580,000 $3,623,160,000 1,113,580,000 $14,178,185,000 1,137,640,000 $3,244,650,000 1,137,640,000 Federal R eserve..................... Foreign Official Institutions .. $12,167,120,000 1,217,435,000 255,300,000 $4,736,740,000 1,217,435,000 255,300,000 $15,315,825,000 1,200,000,000 626,200,000 $4,382,290,000 1,200,000,000 626,200,000 T o t a l s ................................... $13,639,855,000 $6,209,475,000 $17,142,025,000 $6,208,490,000 U.S. Treasury......................... T o t a l s .................................... $ By class o f bidder Public Com petitive................... Noncompetitive............. S u b t o t a l s ...........................
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