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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States C ir c u la r N o . 9 6 7 2 1 OFFERING OF TW O SERIES OF TREASURY B ILLS [ A p r il 1 8 , 1 9 8 4 J $5,000,000,000 of 91-Bay Bills, To Be Issued A pril 26, 1984, D ue July 26, 1984 $5,000,000,000 of 182-Bay Bills, To Be Issued A pril 26, 1984, Due O ctober 25, 1984 To All Banking Institutions, and Others Concerned, in the Second Federal Reserve District: Following is the text of a notice issued by the Treasury Department: T h e D e p a r t m e n t o f th e T r e a s u r y , b y th is p u b lic n o t ic e , in v it e s t e n d e r s f o r t w o s e r ie s o f T r e a s u r y b ills to t a lin g a p p r o x im a te ly $ 1 0 ,0 0 0 m il lio n , t o b e is s u e d A p r il 2 6 , 1 9 8 4 . T h is o f f e r in g w ill r e s u lt in a p a y d o w n f o r th e T r e a s u r y o f a b o u t $ 2 ,4 5 0 m il lio n , a s th e m a t u r in g b ills a r e o u t s t a n d in g in th e a m o u n t o f $ 1 2 ,4 4 5 m illio n , in c lu d in g $ 9 6 9 m illio n c u r r e n t ly h e ld b y F e d e r a l R e s e r v e B a n k s a s a g e n ts fo r f o r e ig n a n d in t e r n a t io n a l m o n e t a r y a u t h o r itie s a n d $ 2 ,2 3 5 m il lio n c u r r e n tly h e ld b y F e d e r a 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 . The size of this offering has been reducedfrom re cent levels in order to ensure that the current debt ceiling is not exceeded. T h e t w o s e r ie s o f f e r e d a r e a s f o ll o w s : 9 1 -d a y b ills (t o m a t u r ity d a te ) fo r a p p r o x im a te ly $ 5 ,0 0 0 m illio n , r e p r e s e n tin g a n a d d it io n a l a m o u n t o f b ills d a t e d J a n u a r y 2 6 , 1 9 8 4 , a n d t o m a tu r e J u ly 2 6 , 1 9 8 4 ( C U S I P N o . 9 1 2 7 9 4 F P 4 ) , c u r r e n tly o u t s t a n d in g in th e a m o u n t o f $ 6 ,2 3 2 m il lio n , th e a d d it io n a l a n d o r ig in a l b ills t o b e fr e e ly in t e r c h a n g e a b le . 1 8 2 -d a y b ills fo r a p p r o x im a te ly $ 5 ,0 0 0 m il lio n , t o b e d a t e d A p r il 2 6 , 1 9 8 4 , a n d t o m a tu r e O c to b e r 2 5 , 1 9 8 4 ( C U S I P N o . 9 1 2 7 9 4 F Z 2 ). B o t h s e r ie s o f b ills w ill b e is s u e d fo r c a s h 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 A p r il 2 6 , 1 9 8 4 . T e n d e r s f r o m F e d e r a l R e s e r v e B a n k s fo r t h e m s e lv e s a n d a s a g e n ts fo r f o r e ig n a n d in t e r n a t io n a l m o n e t a r y a u t h o r itie s w ill b e a c c e p t e d a t th e w e ig h te d a v e r a g e b a n k d is c o u n t r a te s o f a c c e p t e d c o m p e t it iv e te n d e r s . A d d i t io n a l a m o u n ts o f th e b ills m a y b e is s u e d to F e d e r a l R e s e r v e B a n k s , a s a g e n ts f o r f o r e ig n a n d in t e r n a t io n a l m o n e t a r y a u t h o r itie s , t o th e e x te n t th a t th e a g g r e g a t e a m o u n t o f t e n d e r s f o r s u c h a c c o u n ts e x c e e d s th e a g g r e g a t e a m o u n t o f m a tu r in g b ills h e ld b y th e m . T h e b ills w ill b e is s u e d o n a d is c o u n t b a s is u n d e r c o m p e t it iv e a n d n o n c o m p e t it iv e b id d in g , a n d a t m a t u r ity th e ir p a r a m o u n t w ill b e p a y a b le w it h o u t in te r e s t. B o th s e r ie s o f b ills w ill b e is s u e d e n tir e 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 lt ip le , o n th e r e c o r d s e ith e r o f th e F e d e r a l R e s e r v e B a n k s a n d B r a n c h e s , or o f th e D e p a r tm e n t o f th e T r e a s u r y . T e n d e r s w ill b e r e c e iv e d a t F e d e r a l R e s e r v e B a n k s a n d B r a n c h e s a n d a t th e B u r e a u o f th e P u b lic D e b t , W a s h in g t o n , D .C . 2 0 2 3 9 , p r io r t o 1 :0 0 p . m . , E a s te r n S ta n d a r d tim e , M o n d a y , A p r il 2 3 , 1 9 8 4 . F o r m P D 4 6 3 2 - 2 (f o r 2 6 -w e e k ser ie s) o r F o r m P D 4 6 3 2 -3 (f o r 1 3 -w e e k ser ie s) s h o u ld b e u se d t o s u b m it te n d e r s fo r b ills t o b e m a in ta in e d o n th e b o o k - e n t r y r e c o r d s o f th e D e p a r tm e n t o f th e T r e a s u r y . E a c h te n d e r m u s t s ta te th e p a r a m o u n t o f b ills b id f o r , w h ic h m u s t b e 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 s t b e in m u lt ip le s o f $ 5 ,0 0 0 . C o m p e t i t iv e te n d e r s m u s t a ls o s h o w th e y ie ld d e s ir e d , e x p r e s s e d o n a b a n k d is c o u n t r a te b a s is w ith t w o d e c im a ls , e .g . , 7 .1 5 % . F r a c t io n s m a y n o t b e u sed . B a n k in g in s t it u t io n s a n d d e a le r s w h o m a k e p r im a r y m a r k e ts in G o v e r n m e n t s e c u r itie s a n d r e p o r t d a ily t o th e F e d e r a 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 s u c h s e c u r itie s m a y s u b m it te n d e r s fo r a c c o u n t o f c u s to m e r s , i f th e n a m e s o f th e c u s to m e r s a n d th e a m o u n t fo r e a c h c u s to m e r a r e f u r n is h e d . O th e r s a r e o n ly p e r m itt e d t o s u b m it te n d e r s fo r th e ir o w n a c c o u n t . E a c h te n d e r m u s t s ta te th e a m o u n t o f a n y n e t lo n g p o s it io n in th e b ills b e in g o f f e r e d i f s u c h p o s it io n is in e x c e s s 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 r e f le c t p o s it io n s h e ld a s o f 1 2 :3 0 p . m . , E a s te r n tim e , o n th e d a y o f th e 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 ” tr a d in g , a n d fu tu r e s a n d fo r w a r d tr a n s a c tio n s a s w e ll a s h o ld in g s o f o u t s t a n d in g b ills w ith th e s a m e m a t u r ity d a t e a s th e n e w o f f e r in g , e . g . , b ills w ith th r e e m o n t h s t o m a t u r ity p r e v io u s ly o f f e r e d a s s ix -m o n th b ills . D e a le r s w h o m a k e p r im a r y m a r k e ts in G o v e r n m e n t s e c u r itie s a n d r e p o r t d a ily t o th e F e d e r a 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 s u c h s e c u r itie s , w h e n s u b m it t in g te n d e r s fo r c u s to m e r s , m u s t s u b m it a s e p a r a t e te n d e r fo r e a c h c u s t o m e r w h o s e n e t lo n g p o s it io n in th e b ills b e in g o f f e r e d e x c e e d s $ 2 0 0 m il lio n . A n o n c o m p e t it iv e b id d e r m a y n o t h a v e e n te r e d in t o a n a g r e e m e n t , o r m a y n o t m a k e a n a g r e e m e n t w ith r e s p e c t t o th e p u r c h a s e o r s a le o r o th e r d is p o s it io n o f a n y n o n c o m p e t it iv e a w a r d s o f th is is s u e in th is a u c t io n p r io r t o t h e d e s ig n a t e d c lo s i n g tim e f o r r e c e ip t o f t e n d e r s . P a y m e n t f o r th e f u ll p a r a m o u n t o f th e 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 r s s u b m it t e d f o r b ills t o b e m a in t a in e d o n th e b o o k - e n t r y r e c o r d s o f th e D e p a r t m e n t o f th e T r e a s u r y . A c a s h a d j u s t m e n t w ill b e m a d e o n a ll a c c e p t e d te n d e r s f o r t h e d if f e r e n c e b e t w e e n th e p a r p a y m e n t s u b m it t e d a n d th e a c t u a l is s u e p r ic e a s d e te r m in e d in th e a u c t io n . N o d e p o s it n e e d a c c o m p a n y te n d e r s f r o m in c o r p o r a t e d b a n k s a n d tr u s t c o m p a n ie s a n d f r o m r e s p o n s ib le a n d r e c o g n iz e d d e a le r s in in v e s t m e n t s e c u r itie s f o r b ills t o b e m a in t a in e d o n th e b o o k - e n t r y r e c o r d s o f F e d e r a l R e s e r v e B a n k s a n d B r a n c h e s . A d e p o s it o f 2 p e r c e n t o f th e p a r a m o u n t o f t h e b ills a p p lie d f o r m u s t a c c o m p a n y te n d e r s f o r s u c h b ills f r o m o t h e r s , u n le s s a n e x p r e s s 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 tr u s t c o m p a n y a c c o m p a n ie s th e te n d e r s . P u b lic a n n o u n c e m e n t w ill b e m a d e b y th e D e p a r t m e n t o f t h e T r e a s u r y o f th e a m o u n t a n d y ie ld r a n g e o f a c c e p t e d b id s . C o m p e t it iv e b id d e r s w ill b e a d v is e d o f th e a c c e p t a n c e o r r e j e c t io n o f th e ir te n d e r s . T h e S e c r e ta r y o f th e T r e a s u r y e x p r e s s ly r e s e r v e s th e r ig h t t o a c c e p t o r r e je c t a n y o r a ll t e n d e r s , in w h o le o r in p a r t, a n d th e S e c r e t a r y ’s a c t io n s h a ll b e f in a l. S u b j e c t t o t h e s e r e s e r v a t io n s , n o n c o m p e t it iv e te n d e r s f o r e a c h is s u e fo r $ 1 ,0 0 0 ,0 0 0 o r le s s w it h o u t s t a t e d y ie ld f r o m a n y o n e b id d e r w ill b e a c c e p t e d in f u ll a t th e w e ig h t e d a v e r a g e b a n k d is c o u n t r a te (in t w o d e c im a ls ) o f a c c e p t e d c o m p e t it iv e b id s f o r th e r e s p e c t iv e is s u e s . T h e c a lc u la t io n o f p u r c h a s e p r ic e s f o r a c c e p t e d b id s w ill b e c a r r ie d t o th r e e d e c im a l p la c e s o n th e b a s is o f p r ic e p er h u n d r e d , e . g . , 9 9 .9 2 3 , a n d th e d e te r m in a t io n s o f th e S e c r e ta r y o f th e T r e a s u r y s h a ll b e f in a l. S e t t le m e n t f o r a c c e p t e d te n d e r s f o r b ills t o b e m a in t a in e d o n th e b o o k e n tr y r e c o r d s o f F e d e r a l R e s e r v e B a n k s a n d B r a n c h e s m u s t b e m a d e o r c o m p le t e d a t th e F e d e r a l R e s e r v e B a n k o r B r a n c h o n A p r il 2 6 , 1 9 8 4 , in c a s h o r o t h e r im m e d ia t e ly - a v a ila b le fu n d s o r in T r e a s u r y b ills m a t u r in g A p r il 2 6 , 1 9 8 4 . C a s h a d j u s t m e n t s w ill b e m a d e f o r d if f e r e n c e s b e tw e e n th e p a r v a lu e o f th e m a t u r in g b ills a c c e p t e d in e x c h a n g e a n d t h e is s u e p r ic e o f th e n e w b ills . I n a d d it io n , T r e a s u r y T a x a n d L o a n N o t e O p t io n D e p o s it a r ie s m a y m a k e p a y m e n t f o r a llo t m e n t s o f b ills f o r th e ir o w n a c c o u n t s a n d f o r a c c o u n t o f c u s t o m e r s b y c r e d it t o th e ir T r e a s u r y T a x a n d L o a n N o t e A c c o u n t s o n th e s e t t le m e n t d a t e . U n d e r S e c t io n 4 5 4 ( b ) o f th e I n te r n a l R e v e n u e C o d e , th e a m o u n t o f d is c o u n t a t w h ic h t h e s e b ills a r e s o ld is c o n s id e r e d t o a c c r u e w h e n th e b ills a r e s o ld , r e d e e m e d , o r o t h e r w is e d is p o s e d o f . S e c t io n 1 2 3 2 (a ) (4 ) p r o v id e s t h a t a n y g a in o n t h e s a le o r r e d e m p t io n o f t h e s e b ills t h a t d o e s n o t e x c e e d th e r a ta b le s h a r e o f th e a c q u is it io n d is c o u n t m u s t b e in c lu d e d in th e F e d e r a l in c o m e ta x r e tu r n o f th e 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 th e e x c e s s o f th e s t a t e d r e d e m p t io n p r ic e o v e r th e t a x p a y e r ’s b a s is ( c o s t ) f o r th e b ill. T h e r a ta b le s h a r e o f th is d is c o u n t is d e te r m in e d b y m u lt ip ly in g s u c h d is c o u n t b y a f r a c t io n , th e n u m e r a t o r o f w h ic h is th e n u m b e r o f d a y s th e t a x p a y e r h e ld th e b ill a n d th e d e n o m in a t o r o f w h ic h is th e n u m b e r o f d a y s f r o m th e d a y f o ll o w i n g th e t a x p a y e r ’s d a t e o f p u r c h a s e t o th e m a t u r it y o f th e b ill. I f th e g a in o n th e s a le o f a b ill e x c e e d s t h e t a x p a y e r ’s r a ta b le p o r t io n o f th e a c q u is it io n d is c o u n t , th e e x c e s s g a in is tr e a te d a s s h o r t - t e r m c a p it a l g a in . D e p a r t m e n t o f th e 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 n o t ic e , p r e s c r ib e t h e t e r m s o f t h e s e T r e a s u r y b ills a n d g o v e r n th e c o n d it io n s o f th e ir is s u e . C o p ie s o f th e c ir c u la r s a n d te n d e r f o r m s m a y b e o b t a in e d f r o m a n y F e d e r a l R e s e r v e B a n k o r B r a n c h , o r f r o m th e B u r e a u o f th e P u b lic D e b t . This Bank will receive tenders for both series prior to 1:00 p.m ., Eastern Standard time, M onday, April 23, 1984, at the Securities Departm ent o f its Head Office and at its Buffalo Branch. Revised tender forms for both series are en closed. Please be sure to use them to submit tenders and return them in the enclosed envelope. Form s for submitting tenders directly to the Treasury are available from the Government Bond Division of this Bank. Tenders not requiring a deposit may be subm itted by telegraph, subject to written confirm ation; no tenders may be subm itted by telephone. Settlement m ust be made in cash or other immediately available funds or in Treasury securities m aturing on or before the issue date. Treasury Tax and Loan N ote Option Depositaries may make paym ent fo r Treasury bills by credit to their Treasury Tax and Loan N ote Accounts. Results of the last weekly offering of Treasury bills are shown on the reverse side of this circular. A n t h o n y M . So l o m o n , P re s id e n t. (OVER) RESULTS OF LAST W E E K LY OFFERING OF TREASURY K ILLS (TW O SERIES TO EE ISSUED A P R IL 19, 1984) Mange of Accepted Competitive IBids 91-Day Treasury Bills Maturing July 19, 1984 182-Day Treasury Bills Maturing October 18, 1984 Discount Rate Price Discount Rate Investment Rate1 Price 9.76% 9.83% 9.80% Low r a te . . . High rate .. Average rate Investment Rate1 10.15% 10.22% 10.19% 97.533 97.515 97.523 9.90% 9.94% 9.92% 10.57% 10.61% 10.59% 94.995 94.975 94.985 'Equivalent coupon-issue yield. (33 percent of the am ount of 91-day bills bid for at the high discount rate was accepted.) (13 percent of the am ount o f 182-day bills bid for at the high discount rate was accepted.) Total Tenders Received and Accepted 91-Day Treasury Bills Maturing July 19, 1984 By F.R. District (and U.S. Treasury) B o s to n ........................................ New Y o r k .................................. P h ila d e lp h ia .............................. C le v e la n d .................................. R ic h m o n d .................................. A t l a n t a ...................................... C h icag o ....................................... St. L o u i s .................................... M in n e a p o lis.............................. Kansas C ity ................................ Dallas ........................................ San F ran c isc o ............................ Received $ 242,920,000 11,840,770,000 35,160,000 49,055,000 78,'660,000 50,540,000 1,228,680,000 61,520,000 14,995,000 70,055,000 38,960,000 1,085,475,000 182-Day Treasury Bills Maturing October 18, 1984 Accepted $ 92,920,000 4,683,105,000 35,160,000 49,055,000 75,310,000 50,540,000 339,980,000 42,180,000 14,995,000 70,055,000 38,960,000 203,775,000 Received $ 178,495,000 15,741,865,000 22,195,000 58,760,000 80,935,000 59,135,000 1,232,330,000 64,260,000 22,260,000 50,830,000 23,855,000 1,225,175,000 Accepted $ 43,045,000 4,879,545,000 22,195,000 36,560,000 57,995,000 49,565,000 196,790,000 33,260,000 17,260,000 48,080,000 19,505,000 267,075,000 U.S. T re a su ry ............................ 304,620,000 304,620,000 344,080,000 344,080,000 T otals ............................. $15,101,410,000 $6,000,655,000 $19,104,175,000 $6,014,955,000 $12,849,025,000 1,199,755,000 $3,748,270,000 1,199,755,000 $16,232,505,000 1,085,470,000 $3,143,285,000 1,085,470,000 Federal R e s e rv e ....................... Foreign Official Institutions .. $14,048,780,000 1,002,430,000 50,200,000 $4,948,025,000 1,002,430,000 50,200,000 $17,317,975,000 900,000,000 886,200,000 $4,228,755,000 900,000,000 886,200,000 T otals ............................. $15,101,410,000 $6,000,655,000 $19,104,175,000 $6,014,955,000 By class of bidder Public C o m p e titiv e ..................... N o n co m p etitiv e............... Subtotals ......................