Full text of Federal Reserve Bank of New York Circulars : 9946. Offering of Two Series of Treasury Bills

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FEDERAL RESERVE BAWK OF MEW YORK
Fiscal Agent of the United States

_
C ircular N o . 994 6
N o v e m b e r 6, 1985

OFFERING OF TWO SERIES OF TREASURY BILLS
$7,200,000,00© off 91-Day Bills, To Be Issued November 14, 1985, Due February 13, 1986
$7,200,000,00© off 182°Day Bills, To Be Issued November 14, 1985, Due May 15, 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:
T h e D ep artm ent o f the T reasury, b y this pu b lic n o tice, invites tenders
for tw o series o f T reasury bills to ta lin g a p p roxim ately $ 1 4 ,4 0 0 m illion , to
be issued N o v em b er 14, 1985. T his o ffer in g w ill n o t p rovid e new cash for
the T reasury, as the m aturing bills are o u tsta n d in g in the a m o u n t o f $ 14,350
m illio n . T enders w ill b e received at Federal R eserve B anks and Branches
and at th e B ureau o f the P u b lic D eb t, W a sh in g to n , D .C . 2 0239, prior to
1:00 p .m ., E astern Standard tim e, T u esd a y , N o v em b er 12, 1985. T h e tw o
series o ffe r e d are as fo llo w s:
9 1 -d a y b ills (to m a tu rity d a te) fo r a p p ro x im a tely $ 7 ,2 0 0 m illio n ,
rep resen tin g an a d d itio n a l a m o u n t o f bills d a te d A u g u st 15,
1985, an d to m a tu re F eb ru ary 13, 1986 (C U S IP N o . 9 1 2 7 9 4 JS 4),
cu rren tly o u tsta n d in g in th e a m o u n t o f $ 7 ,4 5 9 m illio n , the a d d i­
tio n a l an d o r ig in a l b ills to b e freely in te rch a n g ea b le .
182-day bills (to m aturity d ate) for a p p roxim ately $ 7 ,2 0 0 m illion ,
rep resen tin g an a d d itio n a l a m o u n t o f b ills d a ted M a y 16, 1985,
a n d to m a tu re M a y 15, 1986 (C U S IP N o . 9 1 2 7 9 4 K F 0), currently
o u tsta n d in g in th e a m o u n t o f $ 8 ,5 5 0 m illio n , th e a d d itio n a l and
o rig in a l b ills to b e freely in te rch a n g ea b le .
T h e b ills w ill b e issu ed o n a d isc o u n t b a sis u n d er co m p e titiv e and n o n ­
co m p e titiv e b id d in g , a n d at m a tu rity their par a m o u n t w ill b e p ayab le
w ith o u t in te rest. B o th series o f b ills w ill b e issu ed en tirely in b o o k -e n tr y
fo rm in a m in im u m a m o u n t o f $ 1 0 ,0 0 0 an d in a n y higher $ 5 ,0 0 0 m u ltip le,
o n th e reco rd s eith er o f th e F ed eral R eserv e B a n k s and B r a n c h e s, or o f
th e D ep a rtm e n t o f th e T reasu ry.
T h e b ills w ill b e issu ed fo r ca sh an d in ex ch a n g e fo r T reasu ry b ills
m atu rin g N o v e m b e r 14, 1985. T e n d ers fro m F ed era l R eserv e B an k s fo r
their o w n a c c o u n t an d as a g en ts fo r fo r e ig n a n d in te rn a tio n a l m o n e ta ry
a u th o rities w ill b e a ccep ted at th e w e ig h ted a v erage ban k d isc o u n t rates o f
accep ted c o m p e titiv e ten d e rs. A d d itio n a l a m o u n ts o f th e bills m ay b e
issu ed to F ed eral R eserv e B a n k s, as a g en ts fo r fo reig n a n d in te rn a tio n a l
m o n e ta r y a u th o r itie s, to th e ex ten t th a t th e a g g reg a te a m o u n t o f ten ders
fo r su ch a cc o u n ts ex cee d s th e a g g reg a te a m o u n t o f m atu rin g b ills h eld b y
th e m . F ed eral R eserv e B a n k s cu rren tly h o ld $ 1 ,5 7 6 m illio n as a gen ts fo r
fo r e ig n an d in te r n a tio n a l m o n e ta r y a u th o r itie s, a n d $ 2 ,8 0 3 m illio n fo r
their o w n a c c o u n t. T end ers fo r b ills to b e m a in ta in e d o n th e b o o k -e n tr y
record s o f th e D ep a rtm e n t o f th e T rea su ry sh o u ld b e su b m itted o n F orm
P D 4 6 3 2 -2 (fo r 2 6 -w eek series) or F o rm P D 4 6 3 2 -3 (fo r 1 3-w eek series).
E ach tender m ust state the par a m o u n t o f bills bid fo r, w h ich m ust b e a
m inim u m o f $ 1 0 ,0 0 0 . T enders over $ 1 0 ,0 0 0 m ust b e in m ultiples o f $5,000.
C om p etitiv e tenders m ust a lso sh o w the yield desired, expressed o n a bank
d iscou n t rate basis w ith tw o d ecim a ls, e .g ., 7 .1 5 % . F ractions m ay n o t be
u sed . A single bidder, as d efined in T reasu ry’s single bidder g u id elines, shall
n o t subm it n o n co m p etitiv e tenders to ta lin g m ore than $ 1 ,0 0 0 ,0 0 0 .
B an k in g in stitu tion s and dealers w h o m ake prim ary m arkets in G overn ­
m en t securities and report daily to the F ederal R eserve Bank o f N ew Y ork
their p ositio n s in and b orrow in gs o n su ch securities m a y subm it tenders for
a ccou n t o f cu stom ers, if the n am es o f the cu stom ers and the a m ou n t for
each cu stom er are furnished. O thers are o n ly perm itted to su b m it tenders
fo r their o w n a cco u n t. E ach tender m ust state the a m o u n t o f a n y net lon g
p o sitio n in the bills being o ffer ed i f such p o sitio n is in excess o f $200
m illio n . T his in fo r m a tio n sh ou ld reflect p o sitio n s held as o f 12:30 p .m .,
E astern tim e, o n the d ay o f the a u ctio n . Such p o sitio n s w o u ld include bills
acquired through “ w hen issu ed ” trading, an d futures and forw ard tran sac­
tio n s as w ell as h o ld in g s o f o u tsta nd in g bills w ith the sam e m aturity date as
the n ew o ffe r in g , e .g ., bills w ith three m o n th s to m aturity p reviou sly
o ffe r e d as six -m o n th bills. D ealers, w h o m a k e prim ary m arkets in G overn ­

m en t securities and report daily to th e F ederal R eserve B an k o f N e w Y ork
their p ositio n s in and b orrow in gs o n such securities, w h en subm itting
tenders for cu stom ers, m ust su b m it a separate tender fo r each cu stom er
w h o se net lon g p o sitio n in the bill b ein g o ffer ed exceeds $200 m illion .
A n o n c o m p e titiv e b id der m a y n o t h ave en tered in to an a g reem en t, nor
m a k e an a g reem en t to p u rch ase or sell or o th e rw ise d isp o se o f an y n o n ­
co m p e titiv e aw ard s o f th is issu e b ein g a u c tio n e d p rior t o th e d esig n a ted
c lo sin g tim e fo r receip t o f ten d ers.
P a y m e n t fo r th e fu ll par a m o u n t o f th e b ills a p p lied fo r m u st a c c o m ­
p a n y all ten d e rs su b m itted fo r b ills to b e m a in ta in e d o n th e b o o k -e n tr y
record s o f th e D ep a rtm e n t o f th e T reasu ry. A ca sh a d ju stm en t w ill be
m a d e o n all accep ted ten d ers fo r th e d iffe r e n c e b etw e e n th e par p a y m e n t
su b m itted an d th e a ctu a l issu e price as d eterm in ed in th e a u c tio n .
N o d e p o sit n eed a c c o m p a n y ten d ers fr o m in co r p o r a te d b a n k s and
tru st co m p a n ie s an d fr o m resp o n sib le an d reco g n iz e d dealers in in v e st­
m en t secu rities fo r b ills to b e m a in ta in e d o n th e b o o k -e n tr y record s o f
F ed eral R eserve B an k s an d B r an c h e s. A d e p o sit o f 2 p ercen t o f th e par
a m o u n t o f th e b ills a p p lied fo r m u st a c c o m p a n y ten d ers fo r such b ills
fro m o th e r s, u n less an exp ress g u a ra n ty o f p a y m e n t b y an in co rp o ra ted
b a n k or tru st co m p a n y a c c o m p a n ie s th e ten d ers.
P u b lic a n n o u n c e m e n t w ill b e m a d e b y th e D ep a r tm e n t o f th e T reasu ry
o f th e a m o u n t an d yield ran ge o f a c c ep ted b id s. C o m p e titiv e b id d ers w ill
b e ad v ised o f th e a ccep ta n ce or r ejectio n o f their ten d e rs. T h e S ecretary
o f th e T reasu ry ex p ressly reserves th e righ t to accep t or reject a n y or all
ten d e rs, in w h o le or in p art, an d th e S ecreta ry ’s a c tio n sh all b e fin a l. S u b ­
je c t to th e se reserv a tio n s, n o n c o m p e titiv e ten d ers fo r ea ch issu e fo r
$ 1 ,0 0 0 ,0 0 0 or less w ith o u t sta ted y ie ld fr o m an y o n e b id d er w ill b e a c ­
cep ted in fu ll at th e w e ig h ted a v erage b a n k d isc o u n t rate (in tw o d ecim a ls)
o f accep ted c o m p e titiv e b id s fo r th e resp ectiv e issu e s. T h e c a lc u la tio n o f
p u rch ase p rices fo r a c cep ted b id s w ill b e carried to th ree d ecim a l p la ces o n
th e b asis o f price per h u n d r ed , e .g ., 9 9 .9 2 3 , an d th e d e te r m in a tio n s o f the
Secretary o f th e T reasu ry sh all b e fin a l.
S ettlem en t fo r accep ted ten ders fo r b ills to b e m a in ta in e d o n th e b o o k en try records o f F ed eral R eserve B an k s an d B ranches m u st b e m a d e or
co m p le te d at th e F ed eral R eserve B a n k or B ranch o n th e issu e d a te , in
cash or other im m e d ia te ly -a v a ila b le fu n d s or in T reasury b ills m atu rin g
o n th at d a te . C ash a d ju stm en ts w ill b e m a d e fo r d iffe r e n c e s b e tw een the
par v a lu e o f th e m atu rin g b ills a c cep ted in ex c h a n g e an d th e issu e price o f
th e n ew b ills. In a d d itio n , T reasu ry T a x a n d L o a n N o te O p tio n
D e p o sita r ie s m a y m a k e p a y m e n t fo r a llo tm e n ts o f b ills fo r their ow n
a cc o u n ts an d fo r a c c o u n t o f cu sto m ers b y cred it to their T reasu ry T ax
an d Loan Note Accounts on th e se ttlem en t d a te .
In gen era l, i f a b ill is p u rch a sed at issu e a fter J u ly 18, 1984, an d h eld
to m a tu rity , th e a m o u n t o f d isc o u n t is rep o rta b le as o rd in ary in c o m e in
th e F ed eral in c o m e tax return o f th e o w n er at th e tim e o f re d e m p tio n .
A c c r u a l-b a sis ta x p a y e rs, b a n k s, an d o th e r p erso n s d e sig n a ted in se c tio n
1281 o f th e In tern al R ev en u e C o d e m u st in c lu d e in in c o m e th e p o r tio n o f
th e d isc o u n t fo r th e p erio d d u rin g th e ta x a b le year su ch h o ld er h eld the
b ill. I f th e b ill is so ld or o th e r w ise d isp o se d o f b e fo r e m a tu rity , th e p o r ­
tio n o f th e g ain eq u a l to th e a ccru ed d isc o u n t w ill b e treated as ord in ary
in c o m e . A n y excess m ay b e treated as ca p ita l g a in .
D ep artm ent o f the T reasury C irculars, P u b lic D eb t Series— N o s . 26-76
and 27-76, T reasu ry’s single bidder g u id elin es, an d this n o tic e prescribe the
term s o f these T reasury bills an d govern the c o n d itio n s o f their issue.
C op ies o f the circulars, gu id elines, an d tender form s m ay b e o b tain ed from
any Federal R eserve B ank or B ranch, or fro m the B ureau o f the P u b lic D eb t.

This Bank will receive tenders for both series prior to 1:00 p.m., Eastern Standard time, Tuesday, November 12, 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)

Closing date for receipt of tenders is Tuesday, November 12, 1985.

RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS
(TWO SERIES TO BE ISSUED NOVEMBER 7, 1985)

RANGE OF ACCESSED
53-wosk U U i
COMPETITIVE BIDS! aiWiag February 6P 1986
Discount Inveettaent
Sate
gate 1/ Prise
7.16% a/ 7,39%
Low
11,190
High
7.23%
7.47%
§8,172
7.21%
7.43%
Av®ra§@
98.177
1
tender
o
f
$5o000p
000.
§/ Excepting

*!
S§<-week hill©
i: mtuvtm Hsv 8« 1186
§i Si©sownt Xnveetbent
%i Rate
ftsse 1/ Pries
§i 7,25%
7.63%
96,335
\\ 7,31%
7.70%
96,304
7,691
96.309
i! 7.30%

Tender® at the high discount rate for the 13-w®@k bill® wer© allotted 0%,
tmi®m at the high diseaynt rat® for the 26-week hill® wer© allotted 85%,
TENDERS RECEIVED MD ACCEPTED
(So Theugsndi)
te sp ta d
R e c e iv e d
Received

Lseatira
Iost@n
Hew f o r k

Philadelphia
Oli^eigai

Richmond
Atlanta
Ohie&i®
Sts L©pig
HETOapeii©
& an§e§ C i t y
M ia ©
M n

Franei®©©

T reasury

TOTALS
"M S S .

Ce®p®ti£ive
i©ae©sp@tltlv®
Subtotal o Public
Federal !® serve
F o re ig n O f f i c i a l
Institutions

TOTALS

$

4 7 ,6 7 0
1 6 ,8 7 3 ,6 7 5
3 7 .4 6 3
60*725
4 8 .6 6 0
SS o195
1 * 4 2 5 ,3 7 5
9 1 ,4 1 5
3 f fi640
7 2 ,2 2 5
5 1 ,3 3 1
1 .4 5 6 .6 5 5
3 4 3 ,2 2 0

4 7 ,6 7 0
6 ,0 1 7 ,5 2 5
3 7 ,4 6 5
6 0 ,7 2 5
4 8 ,6 6 0
5 5 ,1 9 5
1 3 2 ,0 2 5
5 1 ,4 8 5
1 4 ,6 4 0
72*225
4 1 ,7 8 5
2 1 6 ,5 3 5
3 4 3 ,2 2 0

1

i
s

4 2 ,9 3 0
1 5 ,9 1 7 ,4 3 0
2 1 ,0 0 5
6 1 ,1 2 5
7 9 ,7 1 5
1 5 ,3 6 5
1 ,5 4 3 ,8 3 5
4 3 ,1 0 0
S 4 s 02S
1 6 ,2 0 0
1 ,7 7 6 ,9 8 0
3 8 6 .4 4 5

4 2 ,9 3 0
5 ,6 4 6 ,2 8 0
2 1 ,0 0 5
6 0 ,0 7 5
6 8 ,9 6 5
B29365
4 1 4 ,0 3 5
4 1 j 630
3 9 ,3 5 0
8 3 ,7 2 5
2 6 ,2 0 0
2 9 5 ,4 3 0
3 8 6 .4 4 5

m sm

$

$ 2 0 , 6 0 3 ,3 2 5

$ 7 ,2 0 9 ,1 5 5

$ 2 0 , 1 6 2 ,4 1 5

$ 7 , 2 0 8 , 4SS

$ 1 7 , 7 8 6 ,1 0 5
1 .2 1 8 .1 9 5
$ 1 9 ,0 0 6 ,3 0 0

$ 4 ,3 9 3 ,9 3 5
1 ,2 1 1 ,1 9 5
U T s i 27130

$ 1 7 ,0 1 2 ,4 2 5
9 9 5 .6 6 0
$ 1 8 ,0 0 1 ,8 1 5 '

$ 4 ,0 5 8 ,3 7 5
9 9 5 ,6 6 0
'$ 5 , 9 5 4 , 0 3 5

1 ,4 1 8 ,0 2 5

2 ,4 1 8 ,0 2 5

1 ,4 5 0 ,0 0 0

1 ,4 5 0 ,0 0 0

1 7 9 ,0 0 0

1 7 1 ,0 0 0

7 0 4 .4 0 0

7 0 4 ,4 0 0

$ 2 0 ,6 0 3 ,3 2 5

$ 7 ,2 0 9 ,1 5 5

$ 2 0 , 1 6 2 ,4 1 5

$ 7 ,2 0 8 ,4 3 5

\J Equivalent coupon-l&iufii yield




$

Accepted