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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States Circular No. 9902 July 31, 1985 O F F E R IN G O F T W O SERIES O F TR E A SU R Y B ILLS $7,20©,000,000 off 91-Day Bills, To Be Issued August §, 1985, Due November 7, 1985 $7,200,080,000 off 182-Day Bills, To Be Issued August 8, 1985, Due February 6, 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 D epartm ent o f the Treasury, by this public notice, invites tenders for two series o f Treasury bills totaling approxim ately $14,400 m illion, to be issued August 8, 1985. This offering will provide about $325 m illion o f new cash for the Treasury, as the m aturing bills are outstanding in the am ount o f $14,074 m illion. Tenders will be received at Federal Reserve Banks and Branches and at the Bureau o f the Public Debt, W ashington, D.C. 20239, prior to 1:00 p.m ., Eastern Daylight Saving time, M onday, August 5, 1985. The two series offered are as follows: 91-day bills (to m aturity date) for approxim ately $7,200 million, representing an additional am ount o f bills dated May 9, 1985, and to m ature November 7, 1985 (CUSIP No. 912794 JE5), cur rently outstanding in the am ount o f $7,045 million, the additional and original bills to be freely interchangeable. 182-day bills for approxim ately $7,200 m illion, to be dated August 8, 1985, and to m ature February 6, 1986 (CUSIP No. 912794 JR6). The bills will be issued on a discount basis under competitive and non competitive bidding, and at m aturity their par am ount will be payable w ithout interest. Both series o f bills will be issued entirely in book-entry form in a m inim um am ount o f $10,000 and in any higher $5,000 m ultiple, on the records either o f the Federal Reserve Banks and Branches, or of the D epartm ent o f the Treasury. The bills will be issued for cash and in exchange for Treasury bills m aturing A ugust 8, 1985. In addition to the m aturing 13-week and 26-week bills, there are $8,482 m illion o f m aturing 52-week bills. The disposition o f this latter am ount was announced last week. Tenders from Federal Reserve Banks for their own account and as agents for foreign and international m onetary authorities will be accepted at the weighted average bank discount rates o f accepted competitive tenders. A dditional am ounts o f the bills m ay be issued to Federal Reserve Banks, as agents for foreign and international m onetary authorities, to the extent that the ag gregate am ount o f tenders for such accounts exceeds the aggregate am ount o f m aturing bills held by them . For purposes o f determining such additional am ounts, foreign and international m onetary authorities are considered to hold $1,808 m illion o f the original 13-week and 26-week issues. Federal Reserve Banks currently hold $2,173 million as agents for foreign and international m onetary authorities, and $4,419 million for their own account. These am ounts represent the combined holdings of such accounts for the three issues o f m aturing bills. Tenders for bills to be m aintained on the book-entry records of the D epartm ent of the Treasury should be subm itted on Form PD 4632-2 (for 26-week series) or Form PD 4632-3 (for 13-week series). Each tender must state the par am ount 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 m ust 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 T reasury’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 o f New York their positions in and borrowings on such securities may submit tenders for account of customers, if the names o f the customers and the am ount for each customer are furnished. Others are only permitted to submit tenders for their own account. Each tender m ust state the am ount of any net long position in the bills being offered if such position is in excess of $200 million. This inform ation 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 m aturity 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, m ust submit a separate tender for each customer whose net long position in the bill being offered exceeds $200 million. A noncom petitive bidder may not have entered into an agreem ent, 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. Paym ent for the full par am ount o f the bills applied for m ust accom pany all tenders subm itted for bills to be m aintained on the book-entry records o f the D epartm ent o f the Treasury. A cash adjustm ent will be m ade on all accepted tenders for the difference between the par payment subm itted and the actual issue price as determ ined in the auction. No deposit need accom pany tenders from incorporated banks and trust companies and from responsible and recognized dealers in invest m ent securities for bills to be m aintained on the book-entry records of Federal Reserve Banks and Branches. A deposit o f 2 percent of the par am ount o f the bills applied for m ust accom pany tenders for such bills from others, unless an express guaranty of paym ent by an incorporated bank or trust com pany accompanies the tenders. Public announcem ent will be m ade by the D epartm ent o f the Treasury o f the am ount and yield range of accepted bids. Com petitive 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, noncom petitive tenders for each issue for $1,000,000 or less w ithout 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 determ inations o f the Secretary o f the Treasury shall be final. Settlement for accepted tenders for bills to be m aintained on the bookentry records o f Federal Reserve Banks and Branches m ust be made or completed at the Federal Reserve Bank or Branch on the issue date, in cash or other imm ediately-available funds or in Treasury bills m aturing on that date. Cash adjustm ents will be made for differences between the par value o f the m aturing bills accepted in exchange and the issue price of the new bills. In addition, Treasury Tax and Loan Note Option Depositaries may m ake paym ent for allotm ents of bills for their own accounts and for account of customers by credit to their Treasury Tax and Loan Note A ccounts on the settlement date. In general, if a bill is purchased at issue after July 18, 1984, and held to m aturity, the am ount of discount is reportable as ordinary income in the Federal income tax return o f the owner at the time o f redem ption. Accrual-basis taxpayers, banks, and other persons designated in section 1281 o f 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 o f before m aturity, 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 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 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 of the Public Debt. This Bank will receive tenders for both series prior to 1:00 p.m., Eastern Daylight Saving time, Monday, August 5, 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. (OVER) RESULTS O F LA ST W EEKLY O FFE R IN G O F TR EA SU R Y BILLS (TW O SERIES TO BE ISSU ED A U G U ST 1, 1985) of accepted 13-week bills 26-wsek bills COMPETITIVE BIDS? maturing October 31, 1985 i maturing January 3Gr 1986 Discount Investment ; Diicount Xnvsstisnt Eat® Rut* 1/ Price i Rate__ lute 1/ Price 7,22% 7.46* 98.173 * Low 7,38% 7,77% 96.269 7,24% 7,48% High 98.170 5 7,41% 7.80% 96.254 7,23% 7.47% 7.401 Average 98.172 s 7,79% 96.239 RANGE Tender® at £he high d i s c o u n t rate for the IS^weeR bill© were allotted 621* Tender® at the high discount rat® for the 26-waek bills were allotted 43%, TENDERS RECEIVED AND ACCEPTED (In Thousands) Received Accepted Received Location Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St, Louis Minneapolis Kansas City Dallas $®n Francisco Treasury TOTALS Competitive Noncompetitive Subtotals Public Federal Reserve Foreign Official Institution® TOTALS U $ 45*173 16*157,055 31p235 58*565 79*810 80*240 1,127*835 73*340 36*680 58*145 46*890 1*570*135 289*810 S 45,175 6*142*640 31,235 55,265 50,985 48,875 140*130 52,580 27*180 58*145 36,890 224*830 289*810 919,654,915 43*440 17*112*875 26,815 34*115 86,615 58*750 1,356,420 68*170 43*705 71*520 34*045 1,355,465 349*005 $ 45,440 5*924*523 26*815 34*113 75,780 50*730 254*480 48*170 43*705 67,670 26*19S 254,675 34§o005 $7*203*760 $20,642,940 $7,201,325 $16*878*810 1,177,545 $18*056*333 $4,427,655 1*177*545 $5,605,200 $17*746*920 1*099*620 $18,846,540 $4,305,305 1*099*620 15733035 1*142*860 1,142,860 1,100,000 1,100,000 455*700 455*700 696*400 696*400 $19,654*915 $7,203,760 $20,642*940 $7,201,325 Equivalent coupon-issue yield, $ Accepted 1
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