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FEDERAL RESERVE HAWK OF NEW YORK Fiscal Agent of the United States Circular No. 9920 September 12, 1985 TREASURY TO AUCTION $9,250 MILLION OF 2-YEAR NOTES To A ll B anking Institutions, and Others Concerned, in the Second Federal Reserve District: The following statement was issued by the Treasury Department: The Department of the Treasury will auction $9,250 million of 2-year notes to be issued September 30, 1985. This issue will provide about $875 million new cash, as the maturing 2-year notes held by the public amount to $8,372 million, including $671 million currently held by Federal Reserve Banks as agents for foreign and inter national monetary authorities. In addition to the maturing 2-year notes, there are $3,357 million of maturing 4-year notes held by the public. The disposition of this latter amount will be announced next week. Federal Reserve Banks as agents for foreign and international monetary authorities currently hold $1,294 million, and Government accounts and Federal Reserve Banks for their own accounts hold $1,090 million of maturing 2-year and 4-year notes. The $9,250 million is being offered to the public, and any amounts tendered by Federal Reserve Banks for their own accounts will be added to that amount. Tenders for such accounts will be accepted at the average price of accepted competitive tenders. Due to the public debt limit and Treasury’s need to plan for the debt level on September 30, additional amounts of the notes will not be issued to Federal Reserve Banks as agents for foreign and international monetary authorities in this auction. 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 (Teh 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, September 18, 1985, at the Securities Department of its Head Office and at its Buffalo Branch. All competitive tenders, whether transmitted 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 noncompetitive tenders will be considered timely received if they are mailed to this Bank or its Branch under a postmark no later than September 17. 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. Payment with a tender may be made in cash, by check, in Treasury securities maturing 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 of Treasury Tax and Loan Note Option Depositaries, by credit to a Treasury Tax and Loan Note Account. Payment 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 Bank will not be accepted. Recorded messages provide information 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. G era ld C o r r ig a n , President. (Over) HIGHLIGHTS OF TREASURY OFFERING TO THE PUBLIC OF 2-YEAR NOTES TO BE ISSUED SEPTEMBER 30, 1985 A m o u n t O ffered: To the public Description of Security: Term and type of security................... ................... $9,250 million 2 -year notes Series and CUSIP designation............................... Series Z-1987 (CUSIP No. 912827 SS2) Maturity d ate.......................................................... September 30, 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 .......................................... March 31 and September 30 Minimum denomination 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 ten d ers........................................ 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.................................................... Deposit guarantee by designated institutions........ Key Dates: Receipt of tenders.................................................. Settlement (final payment due from institutions) a) cash or Federal funds.................................... b) readily collectible check................................. Acceptable for TT&L Note Option Depositaries Acceptable Wednesday, September 18, 1985, prior to 1:00 p.m., EDST Monday, September 30, 1985 Thursday, September 26, 1985