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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States Circular No. 9702 July 18, 1984 OFFERING OF TWO SERIES OF TREASURY BILLS $6,600,000,000 of 91-Bay Bills, To Be Issued July 26, 1984, Due October 25, 1984 $6,600,000,000 o f 182-Bay Bills, To Be Issued July 26, 1984, Due January 24, 1985 To All Banking Institutions, 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 of Treasury bills totaling approximately $13,200 million, to be issued July 26, 1984. This offering will provide $1,925 million of new cash for the Treasury, as the maturing bills are outstanding in the amount of $11,275 million, including $1,189 million currently held by Federal Reserve Banks as agents for foreign and international monetary authorities and $1,957 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 $6,600 million, representing an additional amount of bills dated April 26, 1984, and to mature October 25, 1984 (CUSIP No. 912794 FZ2), currently outstanding in the amount of $5,047 million, the additional and original bills to be freely interchangeable. 182-day bills (to maturity date) for approximately $6,600 million, representing an additional amount of bills dated January 26, 1984, and to mature January 24, 1985 (CUSIP No. 912794 GG3), currently outstanding in the amount of $8,481 million, the additional and original bills to be freely interchangeable. Both series of bills will be issued for cash and in exchange for Treasury bills maturing July 26, 1984. 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. 20239, prior to 1:00 p.m., Eastern Daylight Saving time, Monday, July 23, 1984. 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. A single bidder, as defined in Treasury’s single bidder guidelines, shall not submit noncompetitive tenders totaling more than $1,000,000. 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. A noncompetitive bidder may not have entered into an agreement, or may not make an agreement with respect to the purchase or sale or other disposition of any noncompetitive awards of this issue in this auction prior to the designated closing time for receipt of tenders. 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 $1,000,000 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 July 26, 1984, in cash or other immediately-available funds or in Treasury bills maturing July 26, 1984. 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. In addition, Treasury Tax and Loan Note Option Depositaries may make payment for allotments of bills for their own accounts and for account of customers by credit to their Treasury Tax and Loan Note Accounts on the settlement date. 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, Treasury’s single bidder guidelines, and this notice, prescribe the terms of these Treasury bills and govern the conditions of their issue. Copies of the circulars, guidelines, and tender forms may be obtained from any Federal Reserve Bank or Branch, or from the Bureau of the Public Debt. This Bank will receive tenders for both series prior to 1:00 p.m., Eastern Daylight Saving time, Monday, July 23, 1984, 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. Settlement 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 Note Option Depositaries may make payment fo r Treasury bills by credit to their Treasury Tax and Loan Note 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 , President. (OVER) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED JULY 19, 1984) Mange of Accepted Competitive Bids 91-Day Treasury Bills Maturing October 18, 1984 Low rate.......................... ............ High r a te ........................ ............ Average rate .................. ............ Discount Rate Investment Ratex Price 10.05% 10.20% 10.17% 10.45% 10.61% 10.58% 97.460 97.422 97.429 182-Day Treasury Bills Maturing January 17, 1985 Discount Rate 10.54%a 10.62% 10.60% Investment Rate1 Price 11.29% 11.38% 11.36% 94.671 94.631 94.641 ’Equivalent coupon-issue yield. Excepting one tender of $1,500,000. (49 percent of the amount of 91-day bills bid for at the high discount rate was accepted.) (75 percent of the amount of 182-day bills bid for at the high discount rate was accepted.) Total Tenders Received and Accepted 91-Day Treasury Bills Maturing October 18, 1984 Received By F.R. District (and U.S. Treasury) Accepted 247,310,000 11,466,045,000 32,990,000 84,915,000 61,980,000 54,605,000 1,161,240,000 34,310,000 7,135,000 47,565,000 36,970,000 1,441,865,000 $ 158,060,000 4,800,045,000 32,990,000 84,915,000 60,450,000 54,605,000 282,990,000 24,810,000 7,135,000 47,565,000 36,970,000 690,355,000 U.S. Treasury.......................... 319,300,000 T otals .......................... Received $ Accepted 168,840,000 12,435,060,000 27,325,000 66,570,000 64,445,000 59,915,000 1,136,745,000 48,485,000 17,705,000 67,380,000 28,570,000 1,005,255,000 $ 88,840,000 4,928,810,000 27,325,000 54,070,000 64,445,000 54,915,000 151,745,000 40,485,000 17,705,000 67,380,000 28,570,000 629,255,000 319,300,000 450,045,000 450,045,000 $14,996,230,000 $6,600,190,000 $15,576,340,000 $6,603,590,000 Public Com petitive.................... Noncompetitive.............. $12,752,620,000 1,110,780,000 $4,356,580,000 1,110,780,000 $12,848,320,000 1,289,720,000 $3,875,570,000 1,289,720,000 Subtotals .................... Federal R eserve...................... Foreign Official Institutions .. $13,863,400,000 1,132,830,000 — $5,467,360,000 1,132,830,000 — $14,138,040,000 1,000,000,000 438,300,000 $5,165,290,000 1,000,000,000 438,300,000 T otals ............................ $14,996,230,000 $6,600,190,000 $15,576,340,000 $6,603,590,000 Boston...................................... New Y o rk ................................ Philadelphia............................ Cleveland................................ Richmond................................ A tlan ta .................................... Chicago.................................... St. L o u is.................................. M inneapolis............................ Kansas City.............................. Dallas ...................................... San Francisco.......................... $ 182-Day Treasury Bills Maturing January 17, 1985 By class o f bidder
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