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lo < ° FED ER AL RESERVE BANK O F NEW YORK Fiscal Agent of the United States December 5, 1972 U.S. TREASURY SECURITIES— STATE AND LOCAL GOVERNMENT SERIES Revision of Treasury Department Circular No. 3-72, Public Debt Series To A ll Commercial B anks, and Others Concerned, in the Second Federal Reserve D istrict: Printed below is a revision, dated November 21, 1972, of Treasury D epartm ent Circular No. 3-72, Public Debt Series, governing U .S. T reasury securities— State and Local Government Series. The revision reflects the following changes: ( a ) T he subscriber may now select an issue and paym ent date later than the date of the subscription, but not more than three w eeks la te r ; and (b ) The securities are now available in the form of bonds w ith m aturities of 7y2 to 10 years. Additional copies of this circular will be furnished upon request. A lfred H a yes, President. REGULATIONS GOVERNING UNITED STATES TREASURY CERTIFICATES OF INDEBTEDNESS — STA TE AND LOCAL GOVERNMENT SERIES, UNITED STATES TREASURY NOTES— STATE AND LOCAL GOVERNMENT SERIES, AND UNITED STATES TREASURY BONDS — STATE AND LOCAL GOVERNMENT SERIES DEPARTMENT CIRCULAR Public Debt Series No. 3-72, Revised The Department of the Treasury The regulations in D epartm ent of the T reasury Circular, Public Debt Series No. 3-72, as amended (31 C F R P a rt 344), have been retitled and further amended, as set forth below. The changes were effected under the authority of 26 U.S.C. 103 (d ), 83 Stat. 656; 31 U.S.C. 753, 754, 754b, and 5 U.S.C. 301. Notice and public procedures thereon are unnecessary as they relate to the fiscal policy of the United States. J o h n K. C a r lo c k , Fiscal A ssistant Secretary under those provisions, the Secretary of the T reasury offers, under the authority of the Second Liberty Bond Act, as amended— (1) United States Treasury Certificates of Indebtedness — State and Local Government Series, (2) United States Treasury Notes — State and Local Government Series, and (3) United States Treasury Bonds — State and Local Government Series, for sale to those entities. The term “govern ment body” as used herein refers to any one of these entities. The term “securities” here in refers jointly to the certificates, notes, and bonds. This offering will continue until terminated by the Secretary of the Treasury. Departm ent of the T reasury Circular, Public Debt Series No. 3-72, dated May 22, 1972, as amended (31 C F R P a rt 344), is hereby further amended and issued as De partm ent of the T reasury Circular, Public Debt Series No. 3-72, Revised. Sec. 344.0 O ffering of securities 344.1 Description of securities 344.2 Subscription for purchase 344.3 Issue date and payment 344.4 Redemption 344.5 General provisions § 344.0 Offering of securities. In order to provide States, municipalities and other government bodies described in section 103 (a ) (1) of the Internal Revenue Code of 1954 and the regulations thereunder with investments tailored to their needs W ashington, N ovem ber 21, 1972 § 344.1 Description of securities. (a ) General.—The securities will be is sued in book-entry form on the books of the D epartm ent of the Treasury, Bureau of the Public Debt, W ashington, D.C. 20226. They may not be transferred by sale, ex change, assignment or pledge, or otherwise. (b ) Term s and rates of interest. (1) Certificates of indebtedness. — The certificates will be issued in multiples of $5,000 with periods of m aturity fixed, at the option of the government body, for (i) 3 months, (ii) months, (iii) 9 months, or (iv) 1 year. Each certificate will bear such rate of interest as the government body may 6 (Over) designate, provided th at it shall not be more than the current T reasury rate on a com parable m aturity, reduced by one-eighth of percent, on the date the subscription is submitted. The applicable T reasury rates will be determined by the T reasury not less often than monthly, and will be available at Federal Reserve Banks and Branches. In terest on the certificates will be computed on an annual basis and will be payable at m aturity with the principal amount. (2) N o tes.—The notes will be issued in multiples of $5,000 with periods of m aturity fixed, at the option of the government body, from 1 year months up to and including 7 years, or for any intervening half-yearly period. Each note will bear such rate of interest as the government body may desig nate, provided that it shall not be more than the current T reasury rate on a com parable m aturity, reduced by one-eighth of percent, on the date the subscription is submitted. The applicable T reasury rates will be determined by the T reasury not less often than monthly, and will be available at Federal Reserve Banks and Branches. Interest on the notes will be payable on a semiannual basis by T reasury check on June 1 and December 1, and at m aturity if other than June 1 or December 1. Final interest will be paid with the principal. (3) B onds.—The bonds will be issued in multiples of $5,000 with periods of m aturity fixed, at the option of the governm ent body, months up to and including from 7 years years, or for any intervening half-yearly period. Each bond will bear such rate of interest as the government body may desig nate, provided that it shall not be more than the current T reasury rate on a comparable m aturity, reduced by one-eighth of per cent, on the date the subscription is sub mitted. The applicable T reasury rates will be determined by the T reasury not less often than monthly, and will be available at Federal Reserve Banks and Branches. Interest on the bonds will be payable on a semiannual basis by T reasury check on June 1 and December 1, and at m aturity if other than June 1 or December 1. Final in terest will be paid with the principal. 1 6 1 10 6 1 § 344.2 Subscription for purchase. A government body may purchase a se curity under this offering by submitting a subscription and making payment to a Fed eral Reserve Bank or Branch. The sub scription, dated and signed by an official authorized to make the purchase, must state the amount, issue date, m aturity and interest rate of the security desired, and must give the title of the designated official authorized to redeem it. Separate subscrip tions must be submitted for certificates, notes, and bonds, and for securities of each m aturity and each interest rate. A commer cial bank may act on behalf of a govern ment body in submitting subscriptions. § 344.3 Issue date and payment. The issue date of a security will be the date requested by the subscriber, provided that date is not more than three weeks after the date of the subscription, and provided funds in full payment are available on that date at the Federal Reserve Bank or Branch to which the subscription was sub mitted. § 344.4 Redem ption. (a ) A t m aturity.—A security may not be called for redemption by the Secretary of the T reasury prior to maturity. Upon the m aturity of a security, the T reasury will make payment of the principal amount and interest to the owner thereof by Treasury check, or in accordance with other prior a r rangements made by the governm ent body with the Bureau of the Public Debt. (b ) P rior to m aturity.— Securities may be redeemed at the owner’s option on two days’ notice after one month from the issue date in the case of certificates, and after one year from the issue date in the case of notes and bonds. W here redemption prior to m aturity occurs, the interest for the en tire period the security was outstanding shall be calculated on the basis of the lesser of (i) the original interest rate at which the security was issued, or (ii) an ad justed interest rate reflecting both the shorter period during which the security was actually outstanding and a penalty. The adjusted interest rate is the T reasury rate which would have been in effect on the date of issuance for a marketable T reasury cer tificate, note, or bond m aturing on the quarterly m aturity date prior to redemption (in the case of certificates), or on the semi annual m aturity period prior to redemption (in the case of notes and bonds), reduced in either case by a penalty which shall be the lesser of (i) one-eighth of percent times the number of months from the date of is suance to original maturity, divided by the number of full months elapsed from the date of issue to redemption, or (ii) one-fourth of 1 percent. There shall be deducted from the redemption proceeds, if necessary, any over payment of interest resulting from previous payments made at a higher rate based on the original longer period to m aturity. A schedule showing the adjusted interest rates that apply to securities redeemed prior to their m aturity dates will be available at the time of issuance of the securities. A notice to redeem a security prior to the m aturity date must be given by the official authorized to redeem it, as shown in the subscription for purchase, to the Bureau of the Public Debt, Division of Securities O p erations, W ashington, D. C. 20226, by let ter, wire, or telex, or by telephone con firmed by wire or telex. The telephone number is 202-964-7007, and the telex num ber is 892428. 1 § 344.5 G eneral provisions. (a ) Regulations.—United States T reas ury Certificates of Indebtedness— State and Local Government Series, United States T reasury Notes—State and Local Govern ment Series, and United States Treasury Bonds— State and Local Government Series, shall be subject to the general regulations with respect to United States securities, which are set forth in the Departm ent of the T reasury Circular No. 300, current re vision (31 C FR P a rt 306), to the extent applicable. Copies of the circular may be obtained from the Bureau of the Public Debt, Division of Securities Operations, W ashington, D. C. 20226, or a Federal Re serve Bank or Branch. (b ) F isca l a g e n ts .—F e d e ra l R eserve Banks and Branches, as fiscal agents of the United States, are authorized to perform such services as may be requested of them by the Secretary of the T reasury in con nection with the purchase of, and trans actions in, the securities. (c) Reservations.—The Secretary of the Treasury reserves the right to reject any application for the purchase of securities hereunder, in whole or in part, and to refuse to issue or perm it to be issued any such se curities in any case or any class or classes of cases if he deems such action to be in the public interest, and his action in any such respect shall be final. The Secretary of the T reasury may also at any time, or from time to time, supplement or amend the terms of these regulations, or of any amendments or supplements thereto.
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