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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States Circular No. 9801 February 13, 1985 OFFERING OF TWO SERIES OF TREASURY BILLS o f 91-D ay B ills, T o Be Issued February 21, 19§5, D ue M ay 23, 19§§ ST9d M5 € D(I }<) off 182-Day B ills, T o Be Issued February 21, 1985, Dine A ugust 22, 19$5 M D,®M9 MD 5 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: The Department of the Treasury, by this public notice, invites tenders for two series of Treasury bills totaling approximately $14,000 million, to be issued February 21, 1985. This offering will provide about $525 million of new cash for the Treasury, as the maturing bills were originally issued in the amount of $13,463 million. The two series offered are as follows: 91-day bills (to maturity date) for approximately $7,000 million, representing an additional amount of bills dated November 23, 1984, and to mature May 23, 1985 (CUSIP No. 912794 HD9), currently outstanding in the amount of $6,827 million, the additional and original bills to be freely interchangeable. 182-day bills for approximately $7,000 million, to be dated February 21, 1985, and to mature August 22, 1985 (CUSIP No. 912794 HW7). Both series of bills will be issued for cash and in exchange for Treasury bills maturing February 21, 1985. In addition to the maturing 13-weeic and 26-week bills, there are $8,529 million of maturing 52-week bills. The disposition of this latter amount was announced last week. Federal Reserve Banks, as agents for foreign and international monetary authorities, currently hold $1,745 million, and Federal Reserve Banks for their own account hold $4,321 million of the maturing bills. These amounts represent the combined holdings of such accounts for the three issues of maturing bills. 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. For purposes of deter mining such additional amounts, foreign and international monetary authorities are considered to hold $1,395 million of the original 13-week and 26-week issues. 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 Standard time, Tuesday, February 19, 1985. 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 Govern ment 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 transac tions 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 Govern ment 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, nor make an agreement to purchase or sell or otherwise dispose of any non competitive awards of this issue being auctioned 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 ac cepted 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 February 21, 1985, in cash or other immediately-available funds or in Treasury bills maturing February 21, 1985. 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. In general, if a bill is purchased at issue after July 18, 1984, and held to maturity, the amount of discount is reportable as ordinary income in the Federal income tax return of the owner at the time of redemption. Accrual-basis taxpayers, banks, and other persons designated in section 1281 of the Internal Revenue Code must include in income the portion of the discount for the period during the taxable year such holder held the bill. If the bill is sold or otherwise disposed of before maturity, the por tion of the gain equal to the accrued discount will be treated as ordinary income. Any excess may be treated as 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 Standard time, Tuesday, February 19, 1985, 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 for Treasury bills by credit to their Treasury Tax and Loan Note Accounts. Results of the last weekly offering are shown on the reverse side of this circular. E. GERALD CORRIGAN, President. Please note that the auction will be held Tuesday, February 19, 1985. (OVER) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED FEBRUARY 14, 1985) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing May 16, 1985 Discount Rate Low rate...................................... High r a t e .................................... Average rate ............................... 8.16% 8.23% 8.20% Investment Rate1 182-Day Treasury Bills Maturing August 15, 1985 Discount Rate Price 8.45% 8.52% 8.49% 97.937 97.920 97.927 Investment Rate1 Price 8.74% 8.78% 8.76% 95.824 95.804 95.814 8.26%a 8.30% 8.28% ‘Equivalent coupon-issue yield. Excepting one tender of $550,000. (79 percent of the amount of 91-day bills bid for at the high discount rate was accepted.) (26 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 May 16, 1985 By F.R. District (and U.S. Treasury) Received 182-Day Treasury Bills Maturing August 15, 1985 Accepted Boston.................................... $ 393,285,000 13,824,680,000 New Y o rk ............................... 29,490,000 Philadelphia........................... 42,960,000 Cleveland............................... 60,140,000 Richmond............................... 66,830,000 A tla n ta .................................. 1,224,445,000 Chicago.................................. 79,705,000 St. L o u is................................. 41,525,000 Minneapolis........................... 58,535,000 Kansas C ity............................. 39,730,000 Dallas .................................... 1,016,620,000 San Francisco......................... $ 43,285,000 5,229,330,000 29,490,000 42,960,000 59,510,000 66,830,000 300,875,000 59,705,000 41,525,000 58,535,000 39,730,000 675,620,000 U.S. Treasury......................... 353,495,000 T o t a l s ................................ Received $ Accepted 385,605,000 14,648,815,000 17,695,000 29,385,000 84,105,000 50,165,000 1,086,985,000 45,470,000 46,185,000 50,955,000 34,980,000 801,490,000 $ 35,605,000 5,628,605,000 17,695,000 29,385,000 44,105,000 45,725,000 192,105,000 44,730,000 45,445,000 50,955,000 31,280,000 450,750,000 353,495,000 388,435,000 388,435,000 $17,231,440,000 $7,000,890,000 $17,670,270,000 $7,004,820,000 $14,564,220,000 1,267,805,000 $4,333,670,000 1,267,805,000 $14,706,015,000 1,001,655,000 $4,040,565,000 1,001,655,000 Federal R eserve..................... Foreign Official Institutions .. $15,832,025,000 1,283,615,000 115,800,000 $5,601,475,000 1,283,615,000 115,800,000 $15,707,670,000 1,250,000,000 712,600,000 $5,042,220,000 1,250,000,000 712,600,000 T o t a l s ................................ $17,231,440,000 $7,000,890,000 $17,670,270,000 $7,004,820,000 By class o f bidder Public Competitive................... Noncompetitive............. S ubtotals .........................
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