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FEDERAL RESERVE IBANK OF NEW YORK Fiscal Agent of the United States Circular No. 9898 July 18, 1985 TR E A SU R Y TO A U C T IO N $ 9 , 2§0 M IL L IO N O F 2=Y EA R N O TES To All Banking Institutions, and Others Concerned, in the Second Federal Reserve District: The following statement was issued by the Treasury Departm ent: The Department of the Treasury will auction $9,250 million of 2-year notes to refund $8,369 million of 2-year notes maturing July 31, 1985, and to raise about $875 million new cash. The $8,369 million of maturing 2-year notes are those held by the public, including $496 million currently held by Federal Reserve Banks as agents for foreign and international monetary authorities. The $9,250 million is being offered to the public, and any amounts tendered by Federal Reserve Banks as agents for foreign and international monetary authorities will be added to that amount. Tenders for such accounts will be accepted at the average price of accepted competitive tenders. In addition to the public holdings, Government accounts and Federal Reserve Banks, for their own ac counts, hold $479 million of the maturing securities that may be refunded by issuing additional amounts of the new notes at the average price of accepted competitive tenders. Printed on the reverse side is a table summarizing the highlights of the offering. Copies of the official offering circular will be furnished upon request directed to our Government Bond Division (Tel. No. 212-791-6619). Enclosed is a copy of a standard form for your use in submitting tenders for this offering. This Bank will receive tenders prior to 1:00 p .m ., Eastern Daylight Saving time, Wednesday, July 24, 1985, at the Securities Departm ent of its Head Office and at its Buffalo Branch. A ll competitive tenders, whether transm itted by mail or by other means, must reach this Bank or its Branch by that time. However, for investors who wish to submit noncompetitive tenders and who find it more convenient to mail their tenders than to present them in person, the official offering circular provides that noncom petitive tenders will be considered timely received if they are mailed to this Bank or its Branch under a postm ark no later than July 23. Bidders submitting noncompetitive tenders should realize that it is possible that the average price may be above par, in which case they would have to pay more than the face value for the securities. Paym ent with a tender may be made in cash, by check, in Treasury securities m aturing on or before the issue date of the securities being purchased, by a charge to an institution’s reserve account at this Bank, or, in the case o f Treasury Tax and Loan Note O ption Depositaries, by credit to a Treasury Tax and Loan Note Account. Paym ent by check must be in the form of an official bank check, a Federal funds check (a check drawn by a depository institution on its Federal Reserve account), or a personal check, which need not be certified. All checks must be drawn payable to the Federal Reserve Bank of New York; checks endorsed to this B ank will not be accepted. Recorded messages provide inform ation about Treasury offerings and about auction results: at the Head Office — Tel. No. 212-791-7773 (offerings) and Tel. No. 212-791-5823 (results); at the Buffalo Branch — Tel. No. 716-849-5158 (offerings) and Tel. No. 716-849-5046 (results). Additional inquiries regarding this offering may be made by calling, at the Head Office, Tel. No. 212-791-6619, or, at the Buffalo Branch, Tel. No. 716-849-5016. E. Gerald Corrig an , President. (Over) HIGHLIGHTS OF TREASURY OFFERING TO THE PUBLIC OF 2-YEAR NOTES TO BE ISSUED JULY 31, 1985 Amouimt Offered: To the public ............ ............................................................. .................. . $9,250 million Description of Security: Term and type of security........................................................................... . 2-year notes Series and CUSIP designation................................................................... . Series X -l987 (CUSIP No. 912827 SMS) Maturity date ......................................................................... ............ . . July 31,1987 Call d a te ...................................................................................................... . No provision Interest r a t e ................................................................................................ . To be determined, based on the average of accepted bids Investment yield........................................................................................... . To be determined at auction Premium or discount............................................................................... .. . To be determined after auction Interest payment d a te s ............................................................................... . January 31 and July 31 Minimum denomihation available............................................................. . $5,000 Terms of Sale: Method of sale........................................................................................... . Yield auction Competitive tenders ................................................................................... . Must be expressed as an annual yield, with two decimals, e.g., 7.10% Noncompetitive tenders............................................................................. . Accepted in full at the average price up to $1,000,000 Accrued interest payable by investor.......................................................... . None Payment by non-institutional investors.................................................... . Full payment to be submitted with tender Payment through Treasury Tax and Loan (TT&L) Note Accounts........................................................................................ . Acceptable for TT&L Note Option Depositaries Deposit guarantee by designated institutions............................................ . Acceptable Key Dates: Receipt of tenders........................... .......... <............................................. .. Wednesday, July 24, 1985, prior to 1:00 p.m., EDST Settlement (final payment due from institutions) a) cash or Federal funds......................................................................... . Wednesday, July 31, 1985 b) readily collectible check..................................................................... . Monday, July 29, 1985