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FEDERAL RESERVE OMSK OF !MEW YORK Fiscal Agent of the United States _ C ircu la r N o . 9996 J a n u a ry 29, 1986 OFFERING OF TWO SEMES OF TREASURY MELS $7,000,©00,00© off 91-Day Bills, To Be Issued February 6, 19$(S9 Die May §, 19S6 $7,©©©,000,000 off lS2=Day Bills, To Be Issued February (6, 19§6>, Die August 79 19S6 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: T h e D e p a rtm e n t o f th e T reasu ry , by th is public notice, invites tenders fo r tw o series o f T reasu ry bills to ta lin g a p p ro x im ately $14,000 m illion, to be issued F e b ru a ry 6, 1986. T his o fferin g will result in a p ay d o w n fo r th e T reasu ry o f a b o u t $525 m illion, as th e m a tu rin g bills are o u tstan d in g in th e a m o u n t o f $14,525 m illion. T enders will be received a t F ederal R eserve B anks a n d B ranches an d a t th e B u reau o f th e P u b lic D ebt, W ash in g to n , D .C . 20239, p rio r to 1:00 p .m ., E aste rn S ta n d a rd tim e, M o n d ay , F e b ru a ry 3, 1986. T he tw o series o ffere d are as follow s: 91-day bills (to m a tu rity date) fo r ap p ro x im ately $7,000 m illion, rep resen tin g an a d d itio n al a m o u n t o f bills d ated N o vem ber 7, 1985, a n d to m atu re M ay 8, 1986 (C U S IP N o. 912794 K E3), c u r ren tly o u tstan d in g in th e a m o u n t o f $7,239 m illion, th e a d d i tio n a l a n d o riginal bills to be freely in terchangeable. 182-day bills (to m atu rity date) fo r approxim ately $7,000 m illion, rep resen tin g an a d d itio n al a m o u n t o f bills dated A u g u st 8, 1985, an d to m a tu re A u g u st 7, 1986 (C U S IP N o. 912794 K P 8), c u r ren tly o u tstan d in g in th e a m o u n t o f $8,778 m illion, th e a d d i tio n a l a n d original bills to be freely in terchangeable. T h e bills will b e issued o n a d isco u n t basis u n d e r com petitive a n d n o n com p etitiv e b id d in g , a n d a t m a tu rity th eir p a r a m o u n t will be payable w ith o u t in terest. B o th series o f bills will be issued entirely in b o o k -e n try fo rm in a m in im u m a m o u n t o f $10,000 a n d in an y h igher $5,000 m ultiple, o n th e reco rd s eith er o f the F ed eral R eserve B anks a n d B ranches, o r o f th e D e p artm en t o f th e T reasu ry . T he bills will be issued fo r cash a n d in exchange fo r T rea su ry bills m a tu rin g F e b ru a ry 6, 1986. T enders fro m F ed eral Reserve B anks fo r th eir ow n acco u n t a n d as agents fo r fo reig n a n d in te rn atio n al m o n eta ry au th o ritie s will b e accepted a t th e w eighted average b a n k disco u n t rates o f accep ted com petitive tenders. A d d itio n a l a m o u n ts o f th e bills m ay be issued to F ed eral R eserve B anks, as agents fo r foreign a n d in te rn atio n al m o n eta ry a u th o ritie s, to th e extent th a t th e aggregate a m o u n t o f tenders fo r such acco u n ts exceeds th e aggregate a m o u n t o f m atu rin g bills held by th em . F ed eral R eserve B anks c u rren tly h o ld $1,075 m illion as agents fo r fo reig n a n d in te rn atio n al m o n eta ry atith o rities, an d $3,136 m illion fo r th eir ow n acc o u n t. T enders fo r bills to be m ain tain ed on th e b o o k -e n try reco rd s o f th e D e p artm en t o f th e T rea su ry sh o u ld be su b m itte d o n F o rm P D 4632-2 (fo r 26-w eek series) o r F o rm P D 4632-3 (fo r 13-week series). E ach tender m u st state the p a r am o u n t o f bills bid fo r, w hich m ust be a m inim um o f $10,000. T enders over $10,000 m ust be in m ultiples o f $5,000. C om petitive tenders m ust also show th e yield desired, expressed on a b an k discount rate basis w ith tw o decim als, e.g., 7 .15% . F ractions m ay n o t be used. A single b idder, as defined in T reasu ry ’s single bidder guidelines, shall n o t subm it noncom petitive tenders to taling m ore th an $1,000,000. B anking institutions and dealers w ho m ake prim ary m arkets in G overn m en t securities a n d re p o rt daily to the F ederal Reserve B ank o f New Y ork their p ositions in an d borrow ings on such securities m ay subm it tenders fo r acco u n t o f custom ers, if the nam es o f the custom ers and the am o u n t fo r each custom er are furnished. O thers are only perm itted to subm it tenders fo r their ow n acco u n t. E ach tender m ust state the am o u n t o f any net long p osition in th e bills being o ffered if such position is in excess o f $200 m illion. T his in fo rm a tio n should reflect positions held as o f 12:30 p .m ., E astern tim e, o n th e day o f the auction. Such positions w ould include bills acquired th ro u g h “ w hen issued” trad in g , an d futures and forw ard tran sac tions as well as holdings o f outstanding bills w ith the sam e m atu rity date as th e new o ffering, e.g., bills w ith three m o n th s to m atu rity previously offered as six-m onth bills. D ealers, w ho m ake p rim ary m arkets in G overn m ent securities an d re p o rt daily to the F ederal Reserve B an k o f New Y ork their positions in a n d borrow ings on such securities, w hen subm itting tenders fo r custom ers, m ust subm it a separate ten d er fo r each custom er w hose net long position in the bill being o ffered exceeds $200 m illion. A no n co m p etitiv e b id d er m ay n o t have en tered in to a n a g reem en t, n o r m ak e an ag reem en t to p u rch ase o r sell o r otherw ise dispose o f an y n o n com petitive aw ard s o f this issue being a u ctio n ed p rio r to th e d esignated closing tim e fo r receipt o f tenders. P a y m en t fo r th e full p a r a m o u n t o f th e bills ap p lied fo r m u st acco m p a n y all ten d ers su b m itte d fo r bills to be m ain tain ed o n th e b o o k -e n try records o f th e D e p artm en t o f th e T rea su ry . A cash a d ju s tm e n t will be m ad e on all accepted ten d ers fo r th e differen ce betw een th e p a r p ay m en t su b m itte d a n d th e a ctu al issue price as d eterm in ed in th e au ctio n . N o d ep o sit need acco m p an y ten d ers fro m in c o rp o ra te d b a n k s an d tru s t com panies an d fro m responsible a n d recognized dealers in inv est m en t securities fo r bills to be m ain tain ed o n th e b o o k -e n try reco rd s o f F ed eral R eserve B anks an d B ranches. A d ep o sit o f 2 percen t o f th e p a r a m o u n t o f th e bills ap plied fo r m u st acc o m p a n y ten d ers fo r such bills fro m o th ers, unless a n express g u a ra n ty o f p ay m e n t by a n in co rp o ra te d b a n k o r tru s t c o m p an y accom panies th e ten d ers. P u b lic a n n o u n ce m e n t will be m ad e by th e D e p artm en t o f th e T reasu ry o f th e a m o u n t a n d yield ran g e o f accepted b id s. C o m p etitiv e b id d ers will be advised o f th e acceptance o r re je ctio n o f th eir ten d e rs. T h e S ecretary o f th e T reasu ry expressly reserves th e rig h t to accep t o r reject an y o r all ten d ers, in w hole o r in p a rt, a n d th e S e c retary ’s actio n shall be fin al. S u b je c t to these reserv atio n s, no n co m p etitiv e ten d ers fo r each issue fo r $1,000,000 o r less w ith o u t stated yield fro m an y on e b id d er will be ac cepted in full a t th e w eighted average b a n k d isc o u n t ra te (in tw o decim als) o f accepted com petitive bids fo r th e respective issues. T h e calcu latio n o f p u rc h ase prices fo r accepted bids will b e carried to th ree decim al places on th e basis o f price p er h u n d re d , e .g ., 99.923, a n d th e d e te rm in a tio n s o f th e S ecretary o f th e T rea su ry shall be final. S ettlem ent fo r accepted ten d ers fo r bills to b e m ain tain ed o n th e b o o k en try reco rd s o f F ed eral R eserve B anks a n d B ranches m u st be m ad e o r co m pleted a t th e F ed eral R eserve B an k o r B ra n ch o n th e issue d a te , in cash o r o th e r im m ediately-available fu n d s o r in T reasu ry bills m a tu rin g o n th a t d ate. C ash a d ju stm e n ts will be m ad e fo r differen ces betw een th e p a r value o f th e m atu rin g bills accepted in exchange a n d th e issue price o f th e new bills. In a d d itio n , T rea su ry T ax a n d L o a n N o te O p tio n D ep ositaries m ay m ak e p ay m en t fo r allo tm en ts o f bills fo r th eir ow n acco u n ts a n d fo r a cc o u n t o f cu stom ers by c red it to th eir T rea su ry T ax a n d L o an N o te A c co u n ts o n th e settlem ent d ate. In general, if a bill is p u rc h ase d a t issue a fte r Ju ly 18, 1984, a n d held to m a tu rity , th e a m o u n t o f d isco u n t is re p o rta b le as o rd in a ry inco m e in th e F ed eral incom e tax re tu rn o f th e o w ner a t th e tim e o f re d em p tio n . A ccrual-basis tax p ay ers, b a n k s, a n d o th er p e rso n s d esig n ated in section 1281 o f th e In te rn a l R evenue C o d e m u st in clude in incom e th e p o rtio n o f th e d isco u n t fo r th e p e rio d d u rin g th e tax a b le year such h o ld er held th e bill. I f th e bill is sold o r otherw ise d isposed o f b e fo re m a tu rity , th e p o r tio n o f th e gain eq u al to th e accrued d isc o u n t will be tre a te d as o rd in ary incom e. A n y excess m ay be tre a te d as cap ital gain. D epartm ent o f the T reasury C irculars, P ublic D ebt Series— N os. 26-76 an d 27-76, T reasu ry ’s single bidder guidelines, an d this notice prescribe the term s o f these T reasury bills an d govern th e conditions o f their issue. C opies o f the circulars, guidelines, a n d ten d er form s m ay be o b tain ed fro m any F ederal Reserve B ank or B ranch, o r fro m th e B ureau o f th e P ublic D ebt. This Bank will receive tenders for both series prior to 1:00 p.m., Eastern Standard time, Monday, February 3, 1986, 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 submit ted 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 . G e r a l d C o r r ig a n , President. (OVER) R E SU L T S O F L A ST W E E K L Y O F F E R IN G O F T R E A S U R Y B IL L S (TW O S E R IE S TO B E ISSU E D JA N U A R Y 30, 1986) RANGI Of AdSEFflP COMPETITIVE BIDS? I3-veek hill® ipturing Mav K 19E6 9i@eou«t fnv<3@ taint Fit« fete 1/ 6 . m High 6.921 6.92* 7.12% 7,14% 7.14% Priee ? 26*^®k M U ® i i Discount Xnveetftent" S »e«a Price M iS .lt B 9S.2SS Q 98.251 1 18,211 * 7,021 7,03% 7,031 7. SSI 7.59% 96 o451 96,446 16,446 Tenders i t the high ll§§©unt for the ll- w a k b i l l s %r®?@ a llo tte d T§nJ§r@ ®£ the high discount rate for fefo® 26-veek b i l l s vara a llo tted TENDERS m m w m MB ACCEPTED (tn Thousand$3 Accepted location Hehsoal Atlanta €htc&g® Ito Louis Minneapolis K*nsae ® U f Dallas iin Francisco TOTALS JSffil e»pe«iei^g Pyfelie. teserv® Foreip Official Sastitutiosis TOTALS Received Aeesjttd 36,005 18.466,080 25,375 41,020 42,810 69,830 1,412,131 92,195 39.745 S6.08O 42,625 1,15535 340j,095 | 36,003 6,248,335 25,375 41 d030 4tei?0 50*165 17OS0I5 52,170 U.745 56,010 37e573 966IBS 340,095 t $ 34,830 19,461,190 25*070 28*885 77,740 100,441 1*789,420 11,475 17,435 61,125 31,125 1,121315 361,275 $ 34,830 6,119,915 250O7Q 21,685 S4.S40 12,445 276,020 41*475 11,435 61,125 21,925 111.145 361.275 $22*060,340 17,212,105 1 $23,213,200 $7,205,115 $19,151,025 1,165,955 120,316,980 14,302,790 1,165,955 15,468,745 1 $19*759*875 $3,751,860 i4la§25 $4,701,485 1.518,460 1*318*460 i 1,475,000 1.475,000 224,900 224.100 I 1.028.700 1,628,700 $22,060,340 $7,212,105 i $23*213*100 $7,205,165 $ New Tork Philadelphia fl $ I j Eqyivalafst coupon-Hsue yield. 1 8 8 I 8 S i 6 0 ? I 1 1 141.625 I 6 $20,709,100 0 951* SOI,
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