Fiscal Agent of the United States

[Circular No. 8 6 4 7 T October 1, 1979 J

OFFERING OF TWO SERIES OF TREASURY BILLS

FE D E R A L R ESER VE B ANK O F N E W YO R K

$2,900,000,000 of 91-Day Bills, Additional Am ount, Series Dated July 12, 1979, Due January 10, 1980(To Be Issued October 11, 1979)

$3,000,000,000 of 182-Day Bills, Dated October 11, 1979, Due April 10, 1980To A ll Incorporated Banks and Trust Companies, and Others

Concerned, in the Second Federal Reserve D istrict:

Following is the text of a notice issued by the Treasury Department:T h e D ep a r tm e n t o f th e T r e a su r y , b y th is p u b lic n o tice , in v ite s

ten d ers fo r tw o se r ie s o f T r e a su r y b ills to ta lin g a p p ro x im a te ly $5 ,900 m illio n to b e issu ed O cto b er 11, 1979. T h is o f fe r in g w ill n o t p ro v id e n e w ca sh fo r th e T r e a su r y as th e m a tu r in g b ills are o u tsta n d in g in th e a m o u n t o f $5 ,935 m illio n . T h e tw o se r ie s o ffered are a s f o l lo w s :

91 -d a y b ills ( t o m a tu r ity d a te ) fo r a p p r o x im a te ly $2 ,900 m illio n , r e p resen tin g a n a d d itio n a l a m o u n t o f b ills d ated J u ly 12, 1979, an d to m atu re Ja n u a ry 10, 1980 ( C U S I P N o . 912793 3 L 8 ) , o r ig in a lly issu ed in th e a m o u n t of $3 ,034 m illio n , th e a d d ition a l an d o r ig in a l b ills to be fr e e ly in terch a n g ea b le .

182 -d a y b ills fo r a p p ro x im a te ly $3 ,000 m illio n to be d ated O cto b er 11, 1979, an d to m a tu re A p r il 10, 1980 ( C U S I P N o . 912793 3 Z 7 ) .

B o th se r ie s o f b ills w ill be issu ed fo r ca sh and in e x c h a n g e fo r T r e a su r y b ills m a tu r in g O cto b er 11, 1979. F e d e r a l R e se r v e B a n k s , fo r th e m se lv e s an d a s a g e n ts o f fo r e ig n and in tern a tio n a l m on etary a u th o rities , p re sen tly h o ld $3 ,000 m illio n o f the m a tu r in g b ills . T h e s e a cco u n ts m a y e x c h a n g e b ills th e y h o ld fo r th e b ills n o w b e in g o ffer ed a t th e w e ig h te d a v e r a g e p r ices o f accep ted co m p eti­t iv e ten d ers.

T h e b ills w ill be issu ed on a d isco u n t b a sis un d er co m p etit iv e and n o n co m p etit iv e b id d in g , an d a t m a tu r ity th e ir par a m o u n t w il l be p ayab le w ith o u t in te rest . B o th se r ie s o f b ills w ill b e issu ed en t ir e ly in b o o k -en try fo rm in a m in im u m am ou n t o f $10 ,000 an d in an y h ig h er $ 5 ,0 0 0 m u ltip le , on th e reco rd s e ith er o f th e F ed era l R e se r v e B a n k s and B r a n c h e s , o r o f th e D ep a r tm e n t o f th e T r ea su ry .

T e n d e r s w ill b e rece iv e d a t F ed era l R e s e r v e B a n k s an d B r a n c h e s and a t the B u rea u o f the P u b lic D eb t, W a sh in g to n , D .C . 20226 , up to 1 :30 p.m ., E a s te r n D a y lig h t S a v in g tim e , F r id a y , O cto b er 5, 1979. F o r m P D 4 6 3 2 -2 ( fo r 2 6 -w e e k s e r ie s ) o r F o r m P D 4632-3 ( fo r 1 3 -w eek s e r ie s ) sh o u ld be u sed to su b m it ten d ers fo r b ills to be m ain ta in ed o n th e b o o k -en try reco rd s o f th e D ep a rtm e n t o f the T r ea su ry .

E a c h ten der m u st be fo r a m in im u m o f $10,000. T e n d e r s o v er $10 ,000 m u st be in m u ltip le s o f $5 ,000 . In th e ca se o f co m p etitiv e ten ders th e p r ice o ffer ed m u st be e x p r e s se d on the b a s is o f 100, w ith n o t m o re th a n th ree d ec im a ls , e .g ., 99.925. F r a c tio n s m a y n o t be u sed .

B a n k in g in st itu tio n s an d d ea lers w h o m a k e p r im ary m a rk ets in G o v ern m en t se c u r itie s an d rep ort d a ily to th e F ed era l R e se r v e B a n k o f N e w Y o r k , th e ir p o sit io n s in an d b o r r o w in g s on su ch se cu r itie s m ay su b m it ten d ers fo r a cco u n t o f cu sto m ers, if the n am es o f th e cu sto m ers an d th e a m o u n t o f ea ch cu sto m er are fu rn ish ed . O th e rs a re o n ly p erm itted to su b m it ten d ers fo r the ir o w n acco u n t. E a c h ten d er m u st sta te th e am ou n t o f a n y n e t lo n g p o sit io n in th e b ills b e in g o ffered if su ch p o sit io n is in e x c e s s o f $200 m illio n . T h is in fo rm a tio n sh o u ld reflec t p o s it io n s h e ld a t th e c lo s e o f b u sin ess on the d a y p r io r to the au ction . S u ch p o s it io n s w o u ld in ­clu d e b ills a cq u ired th r o u g h “w h en issu ed ” tra d in g , and fu tu res and fo rw a rd tra n sa c tio n s a s w e ll a s h o ld in g s o f o u ts ta n d in g b ills w ith th e sam e m a tu r ity d ate a s th e n ew o ffer in g , e .g ., b ills w ith th ree

m o n th s to m a tu r ity p r e v io u s ly o ffer ed a s s ix m o n th b ills . D e a le r s w h o m ak e p r im a ry m a rk e ts in G o v ern m en t se c u r itie s a n d rep o rt d a ily to th e F e d e r a l R e s e r v e B a n k o f N e w Y o r k th e ir p o s it io n s in an d b o rro w in g s o n su ch se cu r itie s , w h en su b m itt in g ten d ers fo r c u s ­tom ers, m u st su b m it a sep a ra te ten d er fo r e a c h cu sto m er w h o s e n et lo n g p o sit io n in th e b ill b e in g o ffer ed e x c e e d s $200 m illio n .

P a y m e n t fo r th e fu ll p ar a m o u n t o f th e b ills a p p lied fo r m u st acco m p a n y a ll ten d ers su b m itted fo r b ills to b e m a in ta in ed o n th e b o o k -en try reco r d s o f th e D ep a r tm e n t o f th e T r e a su r y . A ca sh a d ju s tm en t w ill be m ad e o n a ll a ccep ted ten d ers fo r th e d ifferen ce b etw een th e p ar p a y m en t su b m itted a n d th e a c tu a l is su e p r ice a s d eterm in ed in th e au ctio n .

N o d ep o sit n eed a cco m p a n y ten d ers fro m in co rp o ra ted b an k s an d tru st co m p a n ie s an d fro m resp o n s ib le an d r eco g n ized d ea ler s in in v estm en t se c u r itie s fo r b ills to be m a in ta in ed o n th e b o o k -en try reco r d s o f F e d e r a l R e se r v e B a n k s a n d B r a n c h e s . A d ep o s it o f 2 p ercen t o f th e p ar 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 an y ten d ers fo r su ch b ills fro m o th e rs , u n le ss an e x p r e s s g u a ra n ty o f p a y m en t b y an in co rp o ra ted ban k or tr u s t co m p a n y a cco m p a n ies th e ten d ers.

P u b lic an n o u n cem en t w i l l b e m ad e b y th e D e p a r tm e n t o f th e T r e a su r y o f th e a m o u n t and p r ice ra n g e o f accep ted b id s. C o m p eti­t iv e b id d ers w ill be a d v ised o f th e a ccep ta n ce or re je c t io n o f th e ir ten d ers. T h e S e c r e ta r y o f th e T r e a su r y e x p r e s s ly r e se r v e s th e r ig h t to a ccep t o r r e je c t a n y or a ll ten d ers, in w h o le o r in p art, a n d th e S e c r e ta r y ’s a c tio n sh a ll be fina l. S u b je c t to th e se r e serv a tio n s , n o n co m p etit iv e ten d ers fo r ea ch issu e fo r $500 ,000 or le s s w ith o u t sta ted p r ice fro m an y o n e b id der w il l be a ccep ted in fu ll a t th e w e ig h te d a v e r a g e p r ice ( in th ree d e c im a ls ) o f a ccep ted c o m p etit iv e b id s fo r th e resp ec tiv e issu es .

S e tt le m e n t fo r accep ted ten d ers fo r b ills to b e m a in ta in ed on th e b o o k -en try reco r d s o f F ed era l R e s e r v e B a n k s an d B r a n c h e s m u st be m ade o r co m p le ted a t th e F ed era l R e se r v e B a n k or B r a n c h on O cto b er 11, 1979, in ca sh or o th er im m ed ia te ly a v a ila b le fu n d s or in T r e a su r y b ills m a tu r in g O cto b er 11, 1979. C a sh a d ju stm en ts w ill be m ad e fo r d ifferen ce s b e tw een th e p ar v a lu e o f th e m a tu r­in g b ills accep ted in e x c h a n g e an d th e issu e p r ice o f th e n e w b ills .

U n d e r S e c t io n s 4 5 4 ( b ) and 1 2 2 1 (5 ) o f th e In tern a l R ev en u e C od e o f 1954 th e a m o u n t o f d isco u n t a t w h ic h th e se b ills a re so ld is co n sid ered to a ccru e w h en th e b ills a re so ld , red eem ed o r o th e r ­w is e d isp o sed of, an d th e b ills a re e x c lu d e d fro m co n s id er a tio n as cap ita l a ss e ts . A c c o r d in g ly , th e o w n er o f th e se b ills (o th e r th a n l ife in su ra n ce c o m p a n ie s) m u st in c lu d e in h is o r h er F e d e r a l in ­com e ta x retu rn , a s ord in a ry g a in o r lo s s , th e d ifferen ce b e tw een the p r ice p a id fo r th e b ills , w h e th er o n o r ig in a l is su e o r o n su b ­seq u en t p u rch ase , an d th e a m o u n t a c tu a lly r ece iv e d e ith e r u p on sa le o r red em p tio n a t m a tu r ity d u r in g th e ta x a b le y ea r fo r w h ic h th e retu rn is m ade.

D ep a r tm e n t o f th e T r e a su r y C ircu la rs , P u b lic D e b t S e r ie s— N o s . 2 6 -7 6 an d 27 -7 6 , an d th is n o tic e , p rescr ib e th e term s o f th e se T r e a s ­u ry b ills and g o v e r n th e co n d itio n s o f th e ir issu e . C o p ies o f th e c ircu la r s an d ten d er fo rm s m a y b e ob ta in ed fro m an y F e d e r a l R e ­se rv e B a n k o r B ra n ch , or fro m th e B u rea u o f th e P u b lic D eb t.

This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Friday, October 5, 1979, at the Securities Department of its Head Office and at its Buffalo Branch. Tender forms for the respective series are enclosed. Please use the appropriate forms to submit tenders and return them in the enclosed envelope marked “Ten­der for Treasury Bills.” Forms for submitting tenders directly to the Treasury are available from the Treasury and Agency Issues 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. Payment for Treasury bills cannot be made by credit through the Treasury Tax and Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills.

The results of bidding for the previous offering of Treasury bills, to be issued October 4, 1979, will be announced after release by the Treasury Department.

T h o m a s M . T i m l e n ,

First Vice President.Closing date for receipt o f tenders is Friday, O ctober 5.

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