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FEDERAL RESERVE B A N K OF M E W YORK Fiscal Agent of the United States Circular No. 9923 September 20, 1985 Offering of $8,300,000,000 of 364-Day Treasury Bills Due October 2,1986 Dated October 3,1985 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 Department: The Department o f the Treasury, by this public notice, invites tenders for approximately $8,300 million o f 364-day Treasury bills to be dated October 3, 1985, and to mature October 2, 1986 (CUSIP No. 912794 KR4). This issue will not provide new cash for the Treasury, as the matur ing 52-week bill is outstanding in the amount o f $8,311 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, September 26, 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 of the Department o f the Treasury. The bills will be issued for cash and in exchange for Treasury bills maturing October 3, 1985. In addition to the maturing 52-week bills, there are $13,604 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 $1,610 million as agents for foreign and international monetary authorities, and $5,369 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. Ad 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 $75 million o f the original 52-week issue. Tenders for bills to be maintained on the book-entry records o f the Department of the Treasury should be submitted on Form PD 4632-1. 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 of $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 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 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 of $200 million. This information should reflect positions held as of 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 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 of 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 of 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 of 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 of 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 of the Secretary of 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 of 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 of 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 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 of 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. Tenders will be received prior to 1:00 p.m., Eastern Daylight Saving time, Thursday, September 26, 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 sub mitting tenders directly to the Treasury are available from the Government Bond Division of this Bank. Tenders not requir ing 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 previous 364-day bill offering are shown on the reverse side of this circular. E. G era ld C o r r ig a n , President. (OVER) RESULTS OF PREVIOUS 364-DAY OFFERING OF TREASURY BILLS (ISSUED SEPTEMBER 5, 1985) RANGE OF ACCEPTED COMPETITIVE BIDS: Discount Rate Investment Rate (Equivalent Coupon°Issue Y i e l d ) Price 7 o35% 7.37% 7.36% 7.90% 7.92% 7.91% 92.568 92.548 92.558 Low High Ave rage Tenders at the high discount rate were allotted 39%. TENDERS RECEIVED AND ACCEPTED (In Thousands) Received Location Boston New York Philadelphia Cleveland Richmond Atlanta Chicago Sto Louis Minneapolis Kansas City Dallas San Francisco Treasury TOTALS $ 35*385 20,526*560 9*345 189*655 36*760 70*440 1*252*155 84*070 12,555 33*750 16*855 1*382*420 101*335 Accepted $ 14,385 8*149*960 9*345 75*155 16*760 13*390 175*655 49*070 11*945 28*140 6*855 127,210 101*335 $23,751*285 $8*779*205 $21,100,000 416*285 $21*516,285 $6,127,920 416*285 $6*544,205 2*000*000 2*000*000 235*000 235,000 $23,751,285 $8*779*205 Type Competitive Noncompetitive Subtotal* Public Federal Reserve Foreign Official Institutions TOTALS An additional $5*000 thousand of the bills will be issued to foreign official institutions for new cash.
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