Full text of Federal Reserve Bank of New York Circulars : 9941. Offering of Two Series of Treasury Bills

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FEDERAL RESERVE iAWK OF NEW YORK
Fiscal Agent of the United States
Circular N o . 9941
October 30, 1985

O FF E R IN G O F TW O SERIES O F TR E A SU R Y B ILLS
$792(0)©9![MM1>9([M
M
)> off 91-Bay Bills, To Be Issued November 7, 1985, Bee February 6, 1986
$7,200,000,000 off 182-Oay Bills, To Be Issued November 7, 1985, Bee May 8, 1986
To A ll 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 two series o f Treasury bills totaling approximately $14,400 million, to
be issued Novem ber 7, 1985. This offering will not provide new cash for the
Treasury, as the maturing bills are outstanding in the amount o f $14,318
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 standard time, M onday, Novem ber 4, 1985. The two
series offered are as follow s:
91-day bills (to maturity date) for approxim ately $7,200 m illion,
representing an additional am ount o f bills dated A ugust 8, 1985,
and to mature February 6, 1986 (C U SIP N o. 912794 JR6), cur­
rently outstanding in the am ount o f $7,277 m illion, the addi­
tional and original bills to be freely interchangeable.
182-day bills for approxim ately $7,200 m illion, to be dated
N ovem ber 7, 1985, and to m ature M ay 8, 1986 (CUSIP N o.
912794 KE3).
The bills will be issued on a discount basis under com petitive and n on ­
com petitive 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 o f
the Departm ent o f the Treasury.
The bills will be issued for cash and in exchange for Treasury bills
maturing N ovem ber 7, 1985. 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 com petitive tenders. A d ditional 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 aggregate am ount o f tenders
for such accounts exceeds the aggregate am ount o f maturing bills held by
them . Federal Reserve Banks currently hold $1,192 m illion as agents for
foreign and international m onetary authorities, and $2,868 m illion for
their ow n account. Tenders for bills to be m aintained on the book-entry
records o f the Departm ent o f the Treasury should be subm itted on Form
P D 4632-2 (for 26-week series) or Form P D 4632-3 (for 13-week series).
Each tender must state the par am ount o f bills bid for, which must be a
minimum o f $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 ., 7.15% . Fractions may not be
used. A single bidder, as defined in Treasury’s single bidder guidelines, shall
not submit noncom petitive 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 o f 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 must state the am ount o f any net long
position in the bills being offered if such position is in excess o f $200
million. This inform ation 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 m onths 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 N ew York

their positions in and borrowings on such securities, when submitting
tenders for custom ers, must submit a separate tender for each customer
w hose net long position in the bill being offered exceeds $200 million.
A noncom petitive bidder m ay not have entered into an agreem ent, nor
m ake an agreem ent to purchase or sell or otherwise dispose o f any non­
com petitive awards o f this issue being auctioned prior to the designated
closing tim e for receipt o f tenders.
P aym ent for the full par am ount o f the bills applied for must 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.
N o deposit need accom pany tenders from incorporated banks and
trust com panies and from responsible and recognized dealers in invest­
m ent securities for bills to be m aintained on the book-entry records o f
Federal Reserve Banks and Branches. A deposit o f 2 percent o f the par
am ount o f the bills applied for m ust accom pany tenders for such bills
from others, unless an express guaranty o f paym ent by an incorporated
bank or trust com pany accom panies 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 o f 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 w hole 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 w eighted average bank discount rate (in two decim als)
o f accepted com petitive bids for the respective issues. The calculation o f
purchase prices for accepted bids will be carried to three decim al 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.
Settlem ent for accepted tenders for bills to be m aintained on the bookentry records o f Federal Reserve Banks and Branches must be m ade or
com pleted at the Federal Reserve Bank or Branch on the issue date, in
cash or other im m ediately-available funds or in Treasury bills maturing
on that date. Cash adjustm ents will be m ade for differences between the
par value o f the m aturing bills accepted in exchange and the issue price o f
the new bills. In addition, Treasury Tax and Loan N ote O ption
D epositaries m ay m ake paym ent for allotm ents o f bills for their own
accounts and for account o f custom ers by credit to their Treasury Tax
and Loan N ote A ccounts on the settlem ent date.
In general, if a bill is purchased at issue after July 18, 1984, and held
to maturity, the am ount o f discount is reportable as ordinary incom e in
the Federal incom e tax return o f the owner at the tim e o f redem ption.
Accrual-basis taxpayers, banks, and other persons designated in section
1281 o f the Internal Revenue C ode must include in incom e 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 m aturity, the por­
tion o f the gain equal to the accrued discount will be treated as ordinary
incom e. A ny excess m ay be treated as capital gain.
Department o f the Treasury Circulars, Public Debt Series— N os. 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 m ay be obtained from
any Federal Reserve Bank or Branch, or from the Bureau o f the Public Debt.

This Bank will receive tenders for both series prior to 1:00 p.m., Eastern Standard time, Monday, November 4, 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. Gera ld C o r r ig a n ,




P r e s id e n t.

(OVER)

RESULTS O F LA ST W EEKLY O FFE R IN G O F TR EA SU RY BILLS
(TW O SERIES TO BE ISSU ED O C TO B ER 31, 1985)

RANGE Of ACCEPTED
COMPETITIVE BIDS:

U&w
m gh
Aysragg

13-w©@k hill*
D isco u n t
Hate

Rato 1/

P tle e

7.201
7,241
7,241

7.44SS
7.481
7.48%

98.180
98.170
98.170

26-week Mile
.ns May K 1986
% M sc o u n t laT O ifeaest
tf
0
Sat©
feife© 1/
ft
&
7.35%
7,74%
96.284
f
t
&
7,181
7,77%
96,269
aa
7.37%
7,761
16.274

leader© it the high discount rate for eh© 13*week Mils war® allotted 821.
Tenders at the high discount tat® for the 26”t^sk bills
allotted 521,

Location
1m t m
New t&tk
Philadelphia
MshaoEsd
Atisni®
Shleig©
Its Loui®
Minneapolis
City
Pallas
San frsaciiie©
Treasury
TOTALS

TENDERS RECEIVED AND ACCEPTED
(2a Thousands)
6
Received
Accepted
1

44,615
17,363,115
24P175
49,155
47.240
§7,270
1,108,965
91,131
390400
§5,361
3§pHQ
1,097,340
326,060

$20,783,165

S ee
$17,488,315
Competitive
1.198.590
i©aeosp®titive
$18,68M?5
Subtotal* Public
1,562,760
F@d©ral Reserve
F©r@i|p. Official
§33,590
Institutions
$20,713 ,1 6 1
TOTALS
1/ I q u i v a l s n S c o u p o n ^ i s s u ® yield*




Accepted

0

#

ft

44,615
6 6125s©33
24,175
49,155
47.240
56,270
153,905
51,220
34,900
■15,365
33,21©
98,545
326,060

$
37,56#
£ 17,374,185

A
9

1
A

1
8

f
t
S
8

;
a
D

22,110

33,510
66■093
I4.S3S
1,601,890
§4,635
43,815
56,140
32,105
1 *20,020
356,820

$ 37,565
-,085,985

6

22,110

33,510
53,215
47,235
193b770
44,635
31,815
51„615
22,105
125,140
356,820

$7,130,495

t
V
f
t 121,006,725
9

$7,105,920

$3,835,645
iflig§a5W
fWSTB!
1,562,760

I $17,382,860
l 1,017,865
ITM0C725
I 1,350,000

13,482,055
1,017,865
$4,495,92?
1,350,000

533,590
$ 7 ,1 3 0 ,4 8 1

O

1
&
9

1,256,000
$ 2 1 ,0 0 6 ,7 2 5

i 92568D00
$7-, 105,920