Full text of Federal Reserve Bank of New York Circulars : 9686. Offering of $8,250,000,000 of 364-Day Treasury Bills

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FEDERAL RESERVE BANK
OF NEW YORK
Fiscal Agent o f the United States
C ir c u la r N o . 9 6 8 6
J u n e 1, 1 9 8 4

Offering of $8,250,000,000 of 364-Day Treasury Bills
Dated June 14,1984

Due June 13,1985

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 te n d e r s
f o r a p p r o x im a t e ly $ 8 ,2 5 0 m il lio n o f 3 6 4 - d a y T r e a s u r y b ills t o b e d a t e d
J u n e 1 4 , 1 9 8 4 , a n d t o m a t u r e J u n e 1 3 , 19 8 5 ( C U S I P N o . 9 1 2 7 9 4 G M 0 ) .
T h is is s u e w ill p r o v id e a b o u t $ 4 7 5 m il lio n n e w c a s h fo r th e T r e a s u r y , a s
th e m a t u r in g 5 2 -w e e k b ill w a s o r ig in a lly is s u e d in th e a m o u n t o f $ 7 ,7 7 6
m il lio n .
T h e 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 J u n e 1 4 , 1 9 8 4 . In a d d it io n t o th e m a t u r in g 5 2 -w e e k b ills , th e r e
a r e $ 1 2 ,6 5 3 m il lio n o f m a t u r in g b ills w h ic h w e r e o r ig in a lly is s u e d a s
1 3 -w e e k a n d 2 6 - w e e k b ills . T h e d is p o s it io n o f th is la tt e r a m o u n t w ill b e
a n n o u n c e d n e x t w e e k . 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 it ie s c u r r e n t ly h o l d $ 1 ,0 9 7 m il lio n , a n d
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 h o ld $ 5 ,0 8 4 m il lio n o f th e
m a t u r in g b ills . T h e s e a m o u n t s r e p r e s e n t t h e c o m b in e d h o ld in g s o f s u c h
a c c o u n t s f o r t h e th r e e is s u e s o f m a t u r in g b ills . 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 f o r fo 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 it ie 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 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 t s o f th e
b ills m a y b e is s u e d t o 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 i n ­
t e r n a t io n a l m o n e t a r y a u t h o r it ie 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 te n d e r s fo r s u c h a c c o u n t s 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 t u r in g
b ills h e ld b y t h e m . F o r p u r p o s e s o f d e te r m in in g s u c h a d d it io n a l a m o u n t s ,
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 r e c o n s id e r e d t o h o ld $ 5 5
m il lio n o f th e o r ig in a l 5 2 -w e e k is s u e .
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 t e r e s t . T h is 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 l e ,
o n th e r e c o r d s e ith e r o f t h 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 , o r o f
th e D e p a r tm e n t o f th e T re a su 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 D a y lig h t S a v in g t im e , T h u r s d a y , J u n e 7 , 1 9 8 4 . F o r m P D
4 6 3 2 -1 s h o u ld b e u s e d t o s u b m it 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 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 .
E a c h te n d e r m u s t s ta te t h 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 ay n o t be 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 t s 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 i t i o 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 f o r a c c o u n t o f c u s t o m e r s , i f th e n a m e s o f th e c u s t o m e r s a n d
t h e a m o u n t f o r e a c h c u s t o m e r a r e fu r n is h e d . O th e r s a r e o n ly p e r m it t e d to
s u b m it te n d e r s f o 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 i t i o n in t h 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 il lio 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 t e r n t im 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 i s s u e d ” t r a d in g , a n d f u tu r e s
a n d fo r w a r d tr a n s a c t io n s . 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 t h 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
t e n d e r s f o r c u s t o 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 f o 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 it h 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 t h 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 t im 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 f o 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 t e 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 t h 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 t e r m in e d in t h 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 t e 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 it ie s f o r b ills t o b e m a in t a in e d o n t h 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 t h 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 t h 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 t h 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 i t 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 t e 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 t h e r ig h t t o a c c e p t o r r e j e 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 $ 1 , 0 0 0 ,0 0 0 o r le ss
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 . 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 t h r e e d e c im a l p la c e s o n t h e b a s is o f p r ic e p e r h u n d r e d , e . g . ,
9 9 . 9 2 3 , a n d th e d e t e r m in a t io n s o f t h 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 t e 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 J u n e 1 4 , 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 f u n d s o r in T r e a s u r y b ills m a t u r in g
J u n e 1 4 , 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 t w 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 th e is s u e p r ic e o f
t h e n e w b ills . In addition, Treasury Tax and Loan Note Option

Depositaries may make payment for allotments of bills for their own
accounts and for account o f customers by credit to their Treasury Tax
and Loan Note Accounts on the settlement date.
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
t h e r a t a b le s h a r e o f t h e a c q u is it i o 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 t a x r e tu r n o f t h 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 i o n d is c o u n t is t h 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 t a b le s h a r e o f th is d is c o u n t is
d e t e r m in e d b y m u lt ip l y 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 t h 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 t h e n u m b e r o f d a y s f r o m t h 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 t h 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 i o n
d is c o u n t , th e e x c e s s g a in is t r e a t e 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 t h is n o t ic e , p r e s c r ib e th e te 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 t h 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 t h e B u r e a u o f th e P u b lic D e b t .

Tenders will be received prior to 1:00 p.m ., Eastern Daylight Saving time, Thursday, June 7, 1984 at the Securities
Department o f this Bank’s Head Office, at our Buffalo Branch, or at the Bureau o f the Public Debt. A tender form is
enclosed. Please be sure to use that form to submit the tender and return it 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. Settle­
ment must be made in cash or other immediately available funds or in Treasury securities maturing on or before the issue
date. Treasury Tax and Loan N o te O ption D epositaries m ay m ake p aym en t f o r Treasury bills b y credit to their Treasury
Tax and Loan N o te Accounts.



Anthony M. Solomon, President.

J u n e 1 , 1 984

TREASURY C L A R IF IE S N O N C O M P E T IT IV E
B ID D IN G R EQ U IR EM EN T S

The f o l l o w i n g

sta te m e n t w as is s u e d

b y th e T r e a s u r y D e p a r t m e n t:

The D e p a rtm e n t o f t h e T r e a s u r y t o d a y i s s u e d s i n g l e b i d d e r g u i d e l i n e s
to c l a r i f y t h e n o n c o m p e t i t i v e b i d d i n g r e q u ir e m e n t s f o r a u c t i o n s o f
T r e a s u r y b i l l s , n o t e s , an d b o n d s .
T h e g u i d e l i n e s s w h ic h d e f i n e a s i n g l e
b i d d e r , w e re e s t a b l i s h e d t o e l i m i n a t e a b u s e s s u c h a s n o n c o m p e t i t i v e b i d s
b e in g s u b m it t e d b y a s i n g l e b i d d e r t h a t e x c e e d t h e $ 1 , 0 0 0 , 0 0 0 l i m i t f o r
su ch b id s .
The p u rp o se o f th e n o n c o m p e t it iv e b id d in g o p t io n i s to p r o v id e a
b ro ad e r d i s t r ib u t i o n o f T re a su ry s e c u r i t i e s .
I t a llo w s r e l a t i v e l y
s m a ll in v e s t o r s to p a r t ic ip a t e s u c c e s s f u lly in a u c t io n s by p r o v id in g
a s s u r a n c e t h a t t h e y c a n o b t a i n a l i m i t e d a m ou n t o f s e c u r i t i e s w i t h o u t
c o m p e t it io n .
The n o n c o m p e t i t i v e o p t i o n i s n o t in t e n d e d t o b e u s e d a s
a s u b s t i t u t e f o r c o m p e t i t i v e b i d d i n g , w h ic h i s a v a i l a b l e t o a l l
in v e s t o r s .
The g u i d e l i n e s w i l l a p p l y t o a l l t e n d e r s , w h e th e r s u b m it t e d
d i r e c t l y to t h e T r e a s u r y o r a 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
a n a u t h o r i z e d d e p o s i t o r y i n s t i t u t i o n o r p r im a r y d e a l e r .
F a ilu r e
f o llo w th e g u id e li n e s w i l l r e s u l t i n r e j e c t io n o f te n d e r s .

th ro u g h
to

T he g u i d e l i n e s a r e p r i n t e d on t h e r e v e r s e s i d e o f t h i s n o t i c e .
Q u e s tio n s
c o n c e r n i n g t h e g u i d e l i n e s s h o u l d b e d i r e c t e d t o t h e O f f i c e o f F i n a n c i n g , B u re a u o f
t h e P u b l i c D e b t, W a s h in g to n , D. C.
20239 ( T e l . No. 2 0 2 - 3 7 6 - 0 3 1 9 ) .

FEDEPA l R E SE R V E BANK OF NEW YORK
L
F i s c a l A ge n t o f th e U n it e d S t a t e s

[E n c . C i r




No

9686]
(O v e r)

TREASURY.'S SINGLE BIDDER GUIDELINES
FOR NONCOMPETITIVE BIDDING
IN ALL TREASURY SECURITY AUCTIONS
The Investor categories listed below define what constitutes a single noncompetitive bidder.
(1) Bank Holding Companies and Subsidiaries—
A bank holding company (includes the company and/or one or more of its subsidiaries, whether or
not organized as separate entities under applicable law).
(2) Banks and Branches—
A parent bank (includes the parent and/cr one or more of its branches, whether or not organized as
separate entities under applicable law).
(3) Thrift Institutions and Branches —
A thrift institution, such as a savings and loan association, credit union, savings bank, or other
similar entity (includes the principal or parent office and/or one or more of its branches, whether or
not organized as separate entities under applicable law).
(4) Corporations and Subsidiaries—
A corporation (includes the corporation and/or one or more of Its majority-owned subsidiaries,
i.e., any subsidiary more than 50 percent of whose stock is owned by the parent corporation or by any
other of its majority-owned subsidiaries).
(5) Families—
A married person (includes his or her spouse, and any unmarried adult children, having a common
address and/or household).
Note: A minor child, as defined by the law of domicile, is not permitted to submit tenders
individually, or jointly with an adult bidder. (A minor's parent acting as natural
guardian is not recognized as a separate bidder.)
(6) Partnerships—
Each partnership (includes a partnership or individual partner(s), acting together or separately,
who own the majority or controlling interest in other partnerships, corporations, or associations).
(7) Guardians, Custodians, or other Fiduciaries—
A guardian, custodian, or similar fiduciary, identified by (a) the name or title of the fiduciary,
(b) reference to the document, court order, or other authority under which the fiduciary is acting, and
(c) the taxpayer identifying number assigned to the estate.
(8) Trusts—
A trust estate, which is identified by (a) the name or title of the trustee, (b) a reference to
the document creating the trust, e.g., a trust indenture, with date of execution, or a will, (c) the
IRS employer identification number (not social security account number).
(9) Political Subdivisions—
(a) A state government (any of the 50 states and the District of Columbia).
(b) A unit of jocal government (any county, city, municipality, or township, or other unit of
general government, as defined by the Bureau of the Census for statistical purposes, and includes any
trust, investment, or other funds thereof).
(c) A commonwealth, territory, or possession.
(10) Mutual Funds—
A mutual fund (includes all funds that comprise it, whether or not separately administered).
(11) Money Market Funds—
A money market fund (includes all funds that have a common management).
(|2) Investment Agents/Money Managers—
An individual, firm, or association that undertakes to service, invest, and or manage funds for
others.
(|3) Pension Funds—
A pension fund (includes a| I funds that comprise it, whether or not separately administered).
Notes: The definitions do not reflect all bidder situations.
synonymous with "single entity".




''Single bidder!' is not necessarily