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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States Circular N o. 9900 July 26, 1985 O ffering of $8,750,000,000 o f 364-Bay T reasury Bills Bated August 8,1985 Due August 7,1986 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 o f the Treasury, by this public notice, invites tenders for approximately $8,750 million o f 364-day Treasury bills to be dated August 8, 1985, and to mature August 7, 1986 (CUSIP No. 912794 KP8). This issue will provide about $275 million o f new cash for the Treasury, as the maturing 52-week bill is outstanding in the amount o f $8,482 million. Tenders will be received at the Federal Reserve Banks and Branches and at the Bureau o f the Public Debt, Washington, D.C. 20239, prior to 1:00 p.m ., Eastern Daylight Saving time, Thursday, August 1, 1985. 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. This series o f bills will be issued entirely in book-entry form in a minimum amount o f $10,000 and in any higher $5,000 multiple, on the records either o f the Federal Reserve Banks and Branches, or o f the Department o f the Treasury. The bills will be issued for cash arid in exchange for Treasury bills maturing August 8, 1985. In addition to the maturing 52-week bills, there are $14,074 million o f maturing bills which were originally issued as 13-week and 26-week bills. The disposition o f this latter amount will be announced next week. Federal Reserve Banks currently hold $2,290 million as agents for foreign and international monetary authorities, and $4,419 million for their own account. These amounts represent the com bined holdings o f such accounts for the three issues o f maturing bills. Tenders from Federal Reserve Banks for their own account and as agents for foreign and international monetary authorities will be accepted at the weighted average bank discount rate o f accepted competitive tenders. A d ditional amounts o f the bills may be issued to Federal Reserve Banks, as agents for foreign and international monetary authorities, to the extent that the aggregate amount o f tenders for such accounts exceeds the aggre gate amount o f maturing bills held by them. For purposes o f determining such additional amounts, foreign and international monetary authorities are considered to hold $365 million o f the original 52-week issue. Tenders for bills to be maintained on the book-entry records o f the Department o f the Treasury should be submitted on Form PD 4632-1. Each tender must state the par amount o f bills bid for, which must be a minimum o f $10,000. Tenders over $10,OCX) must be in multiples o f $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 m ake primary markets in G overn ment securities and report daily to the Federal Reserve Bank o f New York their positions in and borrowings on such securities may submit tenders for account o f customers, if the names o f 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 o f any net long position in the bills being offered if such position is in excess o f $200 million. This information should reflect positions held as o f 12:30 p.m., Eastern time, on the day o f the auction. Such positions would include bills acquired through “when issued” trading, and futures and forward transac tions as well as holdings o f 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 o f 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 bill 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 o f any non competitive awards o f this issue being auctioned prior to the designated closing time for receipt o f tenders. Payment for the full par amount o f the bills applied for must accom pany all tenders submitted for bills to be maintained on the book-entry records o f the Department o f 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 o f Federal Reserve Banks and Branches. A deposit o f 2 percent o f the par amount o f the bills applied for must accompany'tenders for such bills from others, unless an express guaranty o f payment by an incorporated bank or trust company accompanies the tenders. Public announcement will be made by the Department o f the Treasury o f the amount and yield range o f accepted bids. Competitive bidders will be advised o f the acceptance or rejection o f their tenders. The Secretary o f 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) o f 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 o f price per hundred, e.g., 99.923, and the determinations o f the Secretary o f the Treasury shall be final. Settlement for accepted tenders for bills to be maintained on the bookentry records o f Federal Reserve Banks and Branches must be made or completed at the Federal Reserve Bank or Branch on the issue date, in cash or other immediately-available funds or in Treasury bills maturing on that date. Cash adjustments will be made for differences between the par value o f 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 o f 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. In general, if a bill is purchased at issue after July 18, 1984, and held to maturity, the amount o f discount is reportable as ordinary income in the Federal income tax return o f the owner at the time o f redemption. Accrual-basis taxpayers, banks, and other persons designated in section 1281 o f the Internal Revenue Code must include in income the portion o f the discount for the period during the taxable year such holder held the bill. If the bill is sold or otherwise disposed o f before maturity, the por tion o f the gain equal to the accrued discount will be treated as ordinary income. Any excess may be treated as capital gain. Department o f the Treasury Circulars, Public Debt Series—Nos. 26-76 and 27-76, Treasury’s single bidder guidelines, and this notice prescribe the terms o f these Treasury bills and govern the conditions o f their issue. Copies o f the circulars, guidelines, and tender forms may be obtained from any Federal Reserve Bank or Branch, or from the Bureau o f the Public Debt. Tenders will be received prior to 1:00 p.m., Eastern Daylight Saving time, Thursday, August 1, 1985 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. Results of the previous 364-day bill offering are shown on the reverse side of this circular. E. Gerald Corrigan, President. (OVER) i - ■ - ; r v: ?-: .■ RESU LTS O F PR E V IO U S 364-BAY O FF E R IN G O F TR E A SU R Y M L L S (ISSU ED JU L Y 11, 1985) RANGE OF ACCEPTED COMPETITIVE BIDS s Discount Rate Low High Average Investment Rate (Equivalent Coupon-Issue Y i e l d ) 7 o07% 7.10% 7 o09% 7.58% 7.61% 7 o60% 92.851 92.821 92.831 Tenders at the high discount rate were allotted 1%. TENDERS RECEIVED AND ACCEPTED (In Thousands) Location Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Treasury TOTALS Received $ 11,885 19,703,500 4,960 12,885 47,680 28,440 1,034,790 87,680 10,275 33,060 13,810 1,236,825 128,060 Accepted $ 11,885 8,094,740 4,960 12,885 16,180 12,440 81,540 72,680 10,275 29,860 8,810 21,875 128,060 $22,353,850 $8,506,190 $19,974,365 479,485 $20,453,850 $6,126,705 479,485 $6,606,190 1,800,000 1,800,000 100,000 100,000 $22,353,850 $8,506,190 Type Competitive Noncompetitive S u b t o t a l o Public Federal Reserve Foreign Official Institutions TOTALS Price
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