Full text of Federal Reserve Bank of New York Circulars : 9910. Offering of Two Series of Treasury Bills

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FEDERAL RESERVE BANK OF NEW YORK
Fiscal Agent of the United States

_
Circular No. 9910
August 21, 1985

O FF E R IN G O F TW O SERIES O F TR E A SU R Y BILLS
$7,200,000,000 of 92-Oay Bills, To Be Issued August 29, 198S, Due November 29, 1985
$7,200,000,000 of 182=Oay Bills, To Be Issued August 29, 1985, Due February 27, 1986
To A ll B anking Institutions, and Others Concerned,
in the Second Federal Reserve District:

Following is the text of a notice issued by the Treasury Departm ent:
The Department o f the Treasury, by this public notice, invites tenders
for two series o f Treasury bills totaling approximately $14,400 million, to
be issued August 29, 1985. This offering will provide about $325 million
o f new cash for the Treasury, as the maturing bills are outstanding in the
amount o f $14,072 million. Tenders will be received at 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, Monday,
August 26, 1985. The two series offered are as follows:
92-day bills (to maturity date) for approximately $7,200 million,
representing an additional amount o f bills dated November 29,
1984, and to mature November 29, 1985 (CUSIP No. 912794
HP2), currently outstanding in the amount o f $15,556 million,
the additional and original bills to be freely interchangeable.
182-day bills for approximately $7,200 million, to be dated
August 29, 1985, and to mature February 27, 1986 (CUSIP No.
912794 JU9).
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 o f 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 o f the Federal Reserve Banks and Branches, or of
the Department o f the Treasury.
The bills will be issued for cash and in exchange for Treasury bills
maturing August 29, 1985. 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 rates of
accepted competitive tenders. Additional 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 aggregate amount of maturing bills held by
them. Federal Reserve Banks currently hold $1,150 million as agents for
foreign and international monetary authorities, and $2,720 million for
their own account. 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 4632-2 (for 26-week series) or Form PD 4632-3 (for 13-week series).
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 o f $5,000.
Competitive tenders must also show the yield desired, expressed on a bank
discount rate basis with two decimals, e.g., 7.15Vo. Fractions may not be
used. A single bidder, as defined in Treasury’s single bidder guidelines, shall

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 of
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
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 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

not submit noncompetitive tenders totaling more than $1,000,000.

and Loan N ote A ccounts on the settlem ent date.

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 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 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 o f New York

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 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 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 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 Daylight Saving time, Monday, August 26,
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 C o r r ig a n , President.
Please note that the Treasury bills maturing November 29, 1985 will be 92-day bills.



(OVER)

R E SU L T S O F L A S T W E E K L Y O F F E R IN G O F T R E A S U R Y B ILLS
( T W O S E R I E S T O B E I S S U E D A U G U S T 22, 1985)

&ANCI ©P ACCEPT!®

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3 7 ,3 0 5
1 6 1 s 005
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1>135 s 773
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4 0 ,6 8 0
5 .7 9 6 ,0 1 0
3 2 ,3 3 5
4 1 ,9 7 0
5 1 ,8 7 5
5 5 ,8 5 0
3 5 0 ,9 0 5
5 4 ,0 2 5
37*305
1 3 4 ,0 0 5
3 9 ,3 1 0
2 4 6 ,6 3 5
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1 2 6 ,4 2 5 ,4 7 3
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40* 5 5 0
168*210
41*575
17*405
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