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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States ["Circular No. 9708*] [_ July 27, 1984 O ffering o f $8,250,000,000 o f 364-Day Treasury B ills Dated August 9,1984 Due August 8,1985 To A ll Banking Institutions, 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 their positions in and borrowings on such securities, when submitting for approximately $8,250 million of 364-day Treasury bills to be dated tenders for customers, must submit a separate tender for each customer August 9, 1984, and to mature August 8, 1985 (CUSIP No. 912794 HK3). whose net long position in the bills being offered exceeds $200 million. This issue will provide about $475 million new cash for the Treasury, as A noncompetitive bidder may not have entered into an agreement, nor the maturing 52-week bill was originally issued in the amount of $7,777 make an agreement to purchase or sell or otherwise dispose of any non million. competitive awards of this issue being auctioned prior to the designated The bills will be issued for cash and in exchange for Treasury bills closing time for receipt of tenders. Payment for the full par amount of the bills applied for must accom maturing August 9, 1984. In addition to the maturing 52-week bills, there are $12,524 million of bills maturing (including the 77-day cash manage pany all tenders submitted for bills to be maintained on the book-entry ment bills issued May 24, 1984, in the amount of $2,002 million). The records of the Department of the Treasury. A cash adjustment will be disposition of these amounts will be announced next week. Federal made on all accepted tenders for the difference between the par payment Reserve Banks as agents for foreign and international monetary submitted and the actual issue price as determined in the auction. No deposit need accompany tenders from incorporated banks and authorities currently hold $1,520 million, and Federal Reserve Banks for their own account hold $3,738 million of the maturing bills. These trust companies and from responsible and recognized dealers in invest amounts represent the combined holdings of such accounts for the three ment securities for bills to be maintained on the book-entry records of issues of maturing bills. Tenders from Federal Reserve Banks for Federal Reserve Banks and Branches. A deposit of 2 percent of the par themselves and as agents for foreign and international monetary amount of the bills applied for must accompany tenders for such bills authorities will be accepted at the weighted average bank discount rate of from others, unless an express guaranty of payment by an incorporated accepted competitive tenders. Additional amounts of the bills may be bank or trust company accompanies the tenders. Public announcement will be made by the Department of the Treasury issued to Federal Reserve Banks, as agents for foreign and international monetary authorities, to the extent that the aggregate amount of tenders of the amount and yield range of accepted bids. Competitive bidders will for such accounts exceeds the aggregate amount of maturing bills held by be advised of the acceptance or rejection of their tenders. The Secretary them. For purposes of determining such additional amounts, foreign and of the Treasury expressly reserves the right to accept or reject any or all international monetary authorities are considered to hold $175 million of 1tenders, in whole or in part, and the Secretary’s action shall be final. Sub the original 52-week issue. ject to these reservations, noncompetitive tenders for $1,000,000 or less The bills will be issued on a discount basis under competitive and non without stated yield from any one bidder will be accepted in full at the competitive bidding, and at maturity their par amount will be payable weighted average bank discount rate (in two decimals) of accepted com without interest. This series of bills will be issued entirely in book-entry petitive bids. The calculation of purchase prices for accepted bids will be form in a minimum amount of $10,000 and in any higher $5,000 multiple, carried to three decimal places on the basis of price per hundred, e.g., on the records either of the Federal Reserve Banks and Branches, or of 99.923; and the determinations of the Secretary of the Treasury shall be the Department of the Treasury. final. Tenders will be received at Federal Reserve Banks and Branches and at Settlement for accepted tenders for bills to be maintained on the bookthe Bureau of the Public Debt, Washington, D.C. 20239, prior to 1:00 entry records of Federal Reserve Banks- and Branches must be made or p.m., Eastern Daylight Saving time, Thursday, August 2, 1984. Form PD completed at the Federal Reserve Bank or Branch on August 9, 1984, in 4632-1 should be used to submit tenders for bills to be maintained on the cash or other immediately-available funds or in Treasury bills maturing August 9, 1984. Cash adjustments will be made for differences between book-entry records of the Department of the Treasury. Each tender must state the par amount of bills bid for, which must be the par value of the maturing bills accepted in exchange and the issue a minimum of $10,000. Tenders over $10,000 must be in multiples of price of the new bills. In addition, Treasury Tax and Loan Note Option $5,000. Competitive tenders must also show the yield desired, expressed Depositaries may make payment for allotments of bills for their own on a bank discount rate basis with two decimals, e.g., 7.15%. Fractions accounts and for account of customers by credit to their Treasury Tax may not be used. A single bidder, as defined in Treasury’s single bidder and Loan Note Accounts on the settlement date. In general, if a bill is purchased at issue after July 18, 1984, and held guidelines, shall not submit noncompetitive tenders totaling more than to maturity, the amount of discount is reportable as ordinary income in $ 1,000 , 000 . Banking institutions and dealers who make primary markets in the Federal income tax return of the owner at the time of redemption. Government securities and report daily to the Federal Reserve Bank of Accrual-basis taxpayers, banks, and other persons designated in section New York their positions in and borrowings on such securities may sub 1281 of the Internal Revenue Code must include in income the portion of mit tenders for account of customers, if the names of the customers and the discount for the period during the taxable year such holder held the the amount for each customer are furnished. Others are only permitted to bill. If the bill is sold or otherwise disposed of before maturity, the submit tenders for their own account. Each tender must state the amount portion of the gain equal to the accrued discount will be treated as of any net long position in the bills being offered if such position is in ordinary income. Any excess may be treated as capital gain. excess of $200 million. This information should reflect positions held as Department of the Treasury Circulars, Public Debt Series—Nos. 26-76 of 12:30 p.m., Eastern time on the day of the auction. Such positions and 27-76, Treasury’s single bidder guidelines, and this notice, prescribe the would include bills acquired through “ when issued” trading, and futures terms of these Treasury bills and govern the conditions of their issue. and forward transactions. Dealers who make primary markets in Govern Copies of the circulars, guidelines, and tender forms may be obtained from ment securities and report daily to the Federal Reserve Bank of New York any Federal Reserve Bank or Branch, or from the Bureau of the Public Debt. Tenders will be received prior to 1:00 p.m., Eastern Daylight Saving time, Thursday, August 2, 1984 at the Securities Department of this Bank’s Head Office, at our Buffalo Branch, or at the Bureau of 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 Note Option Depositaries may make payment for Treasury bills by credit to their Treasury Tax and Loan Note Accounts. ANTHONY M. SOLOMON, President.
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