Federal Register, Volume 62 Issue 155 (Tuesday, August 12, 1997)

[Federal Register Volume 62, Number 155 (Tuesday, August 12, 1997)]
[Rules and Regulations]
[Pages 43091-43096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21277]

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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 356

Sale and Issue of Marketable Book-Entry Treasury Bills, Notes,
and Bonds (Department of the Treasury Circular, Public Debt Series No.
1-93)

AGENCY: Bureau of the Public Debt, Fiscal Service, Department of the
Treasury.

ACTION: Final rule.

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SUMMARY: The Department of the Treasury (``Treasury'' or
``Department'') is publishing in final form an amendment to 31 CFR part
356 (Uniform Offering Circular for the Sale and Issue of Marketable
Book-Entry Treasury Bills, Notes, and Bonds). This amendment makes the
necessary changes to accommodate three decimal competitive bidding, in
.005 percent increments, for regular Treasury bills--13-, 26-, and 52-
week bills--and a reduction in the net long position reporting
threshold amount for all Treasury bill auctions (including cash
management bills). The final rule also makes certain technical
clarifications and conforming changes.

DATES: The effective date is September 11, 1997, except for the change
to Sec. 356.13 (Net long position) which is effective November 10,
1997.

ADDRESSES: This final rule has also been made available for downloading
from the Bureau of the Public Debt's Internet site at the following
address: www.publicdebt.treas.gov.

FOR FURTHER INFORMATION CONTACT: Ken Papaj (Director), Lee Grandy or
Kurt Eidemiller (Government Securities Specialists), Department of the
Treasury, Bureau of the Public Debt, Government Securities Regulations
Staff, (202) 219-3632.

SUPPLEMENTARY INFORMATION: 31 CFR part 356, also referred to as the
uniform offering circular, sets out the terms and conditions for the
sale and issuance by the Department of the Treasury to the public of
marketable Treasury bills, notes, and bonds. The uniform offering
circular, in conjunction with offering announcements, represents a
comprehensive statement of those terms and conditions.¹ The
Department

[[Page 43092]]

published for public comment a proposed amendment to the uniform
offering circular on May 5, 1997,² which specifically
requested comments on extending three decimal bidding, in .005 percent
increments, to all Treasury bill auctions (including cash management
bills (``CMBs'')) and reducing the net long position reporting
threshold amount for all Treasury bill auctions (including CMBs) from
$2 billion to $1 billion. The closing date for comments was June 4,
1997. The Department received one comment letter which was submitted by
PSA, the Bond Market Trade Association (``PSA'').³ In
general, PSA expressed support for the changes as proposed, with a few
exceptions which are noted in each respective section below. Treasury
considered the comments expressed in the PSA letter in developing this
final rule.
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\1\ The uniform offering circular was published as a final rule
on January 5, 1993 (58 FR 412). Amendments to the circular were
published on June 3, 1994 (59 FR 28773), March 15, 1995 (60 FR
13906), July 16, 1996 (61 FR 37007), August 23, 1996 (61 FR 43626),
October 22, 1996 (61 FR 54908), January 6, 1997 (62 FR 846), and May
8, 1997 (62 FR 25113).
\2\ 62 FR 24375 (May 5, 1997).
\3\ See letter dated June 4, 1997 from Stephanie S. Wolf, Vice
President and Associate General Counsel of PSA, the Bond Market
Trade Association to Kenneth R. Papaj, Director, Government
Securities Regulations Staff. The comment letter is available for
public inspection and downloading on the Internet, at the address
provided earlier in this rule, and for inspection and copying at the
Treasury Department Library, Room 5030, Main Treasury Building, 1500
Pennsylvania Avenue, NW., Washington, DC 20220.
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The final rule amends Secs. 356.12 and 356.13 of the uniform
offering circular and provides two minor technical clarifications in
Appendix B to part 356 (Formulas and Tables) as well as updated sample
announcements of Treasury auctions in Exhibit A to part 356 (Sample
Announcements of Treasury Offerings to the Public).

A. Three Decimal Competitive Bidding in .005 Percent Increments

In February 1995, Treasury began requiring competitive bids in note
and bond auctions to be expressed as yields using three decimal places,
in .001 percent increments, e.g., 7.123, rather than two decimal
places.⁴ At that time, Treasury did not extend three decimal
bidding to bill auctions because three decimal bidding, in .001 percent
increments, would not provide a price unique to each discount rate for
bills with maturities less than 360 days. Price uniqueness occurs when
each separate discount rate produces a different (unique) price rounded
to three decimal places, i.e., no two discount rates result in the same
price. Price uniqueness is a function of the minimum bid increment
allowed in auctions, price rounding conventions, and the number of days
to maturity.
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\4\ Treasury Press Release was dated February 15, 1995. An
amendment to the uniform offering circular was published on March
15, 1995 (60 FR 13906).
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Under two decimal bidding, price uniqueness is maintained for CMBs
with maturities of 36 days or more. If three decimal bidding in
increments of one-half basis point is extended to CMBs, price
uniqueness would be maintained with maturities of 72 days or more. As
stated in the proposed rule, Treasury does not consider this to be
problematic given auction participants' experience with the non-price
uniqueness of short-term CMBs under the two decimal bidding process.
For regular Treasury bill auctions--13-, 26-, and 52-week bills--three
decimal bidding, in .005 percent increments, would maintain price
uniqueness since these bills have maturities of 90 days or more.
As stated in its comment letter, PSA supports three decimal bidding
for bill auctions with the view that consistent bidding practices for
all Treasury securities would benefit the market and result in an
easier understanding of the requirements for auction participation. The
letter also stated that the conversion to three decimal bidding should
not require significant systems changes since many market participants
already trade Treasury bills in minimum increments of one-half to one-
quarter basis points. However, PSA recommended that two decimal bidding
for CMBs be maintained given market participants' concern with non-
price uniqueness being extended further into the maturity spectrum,
from 36 to 72 days. This concern and ultimate recommendation were based
on PSA's view that, historically, Treasury has generally issued CMBs
with shorter maturities, noting that during the past twelve months most
of the CMBs have been issued with short maturities, with a majority of
less than 36 days. The Department understands PSA's view and
appreciates this concern given that there has been only one CMB issued
since November 1995 with a maturity of more than 72 days. Accordingly,
as PSA recommends, Treasury will not extend three decimal bidding to
CMBs, but will maintain the current two decimal bidding requirement, in
.01 percent increments, for all CMB auctions.
Section 356.12(c)(1)(i) of the final rule reflects the change from
the proposed rule by requiring three decimal bidding, in .005 percent
increments, for regular Treasury bills only. The third decimal must be
expressed in increments of one-half basis point (e.g., 5.320 or 5.325)
in which the final decimal must be either zero or five. The rule
provides that three decimal bidding, in .005 percent increments, will
be a requirement for regular Treasury bill auctions--13-,
26-, and 52-week bills. The final rule also specifically states that
competitive bids for CMBs must show the discount rate bid expressed
with two decimals, in .01 percent increments. Accordingly, the
requirement for competitive bids for CMBs to be expressed in two
decimals, in .01 percent increments, remains unchanged.
As PSA suggested in its comment letter, the effective date for the
change to Sec. 356.12 will be 30 days after publication of the final
rule to provide market participants with sufficient time to update
internal auction policies and procedures. Accordingly, the effective
date of this rule change is September 11, 1997. Although this final
rule amends the uniform offering circular to accommodate three decimal
bidding for regular bill auctions, Treasury will implement this bidding
change through the offering announcements for specific auctions.
Therefore, auction participants should refer to the specific offering
announcements as to when this change in bidding will be implemented,
which in any event will be no sooner than the date referenced above.
All offering announcements will continue to list specific bidding
requirements for each offering, including how competitive bids
submitted for the particular auction must be expressed, and will govern
in the event of an inconsistency with the rules. (See Sec. 356.10)
As stated in the proposed rule, the change from two decimal, in .01
percent increments, to three decimal bidding, in .005 percent
increments, for regular Treasury bills is being adopted to promote more
efficient and aggressive bidding in these auctions and is expected to
lead to marginally higher auction revenues for Treasury.
The change to three decimal competitive bidding, in .005 percent
increments, for regular bill auctions will not affect how awards are
made to noncompetitive bidders, i.e., the price of securities awarded
to noncompetitive bidders in these auctions will continue to be the
price equivalent to the weighted average discount rate of accepted
competitive bids. Finally, the Department wishes to remind auction
participants that the requirement for competitive bids for Treasury
note and bond auctions to be expressed in three decimals, in .001
percent increments, remains unchanged. Further, the restriction against
using fractions still applies to all marketable security auctions.

[[Page 43093]]

B. Decrease in Net Long Position Reporting Threshold Amount

Section 356.13(a) reflects the reduction in the net long position
reporting threshold amount for all Treasury bill auctions (i.e., 13-,
26-, 52-week bills and CMBs) from $2 billion to $1 billion, while
maintaining the $2 billion threshold amount for Treasury note and bond
auctions. This change in the reporting threshold amount is being
adopted in the final rule as it was proposed. PSA supports this change
as reasonable and appropriate and believes that consistently applying
the $1 billion threshold uniformly to all bill auctions, rather than
changing the threshold from time to time, depending on the public
offering amount, will likely result in a better overall understanding
of, and compliance with, the auction rules. PSA requested that more
preparation time be provided for those market participants, who in the
past, may not have come close to approaching the $2 billion threshold.
In its letter, PSA stated that these participants may require
significant changes to their internal auction policies, procedures, and
systems in order to capture and report positions at the lower
threshold. In order to provide market participants with a reasonable
amount of time to make the necessary procedural changes and to notify
their affiliates and customers to ensure the broadest level of
compliance, Treasury accepts PSA's recommendation for a delayed
effective date of 90 days after the final rule is published. The
effective date of the change to this section is November 10, 1997.
The net long position reporting threshold amount for bills, notes,
and bonds will continue to be provided in the offering announcement for
the particular security. As currently stated in Sec. 356.10 of the
uniform offering circular, the offering announcement takes precedence
whenever any provision of the announcement is inconsistent with any
provision of the circular. Section 356.10 affords Treasury the
flexibility to change the net long position reporting threshold amount
by providing the amount in the offering announcement. As stated in the
preamble to the proposed rule, this reduction in the threshold amount
for Treasury bills is being adopted to more effectively achieve a
Treasury financing objective of ensuring a broad distribution of a
security issue, whereby no single bidder is awarded more than 35% of
the public offering less the bidder's net long position as reportable
under Sec. 356.13.

C. Additional Technical Clarifications

Two minor technical changes are also being made with this final
rule. A clarifying note on Treasury's price rounding convention for
conversion of inflation-indexed security yields to equivalent prices is
being added to Appendix B, Section III, Paragraphs A and B after each
resolution. This change was not part of the proposed rule. Also, the
final rule adopts, with a minor conforming revision, the note at the
end of Appendix B, Section IV, Paragraph C. This minor revision
identifies the changes that have been made over the years in the
bidding conventions for Treasury bill auctions. Treasury is not
revising any of the examples of formulas in Appendix B, Section IV
since the change to three decimal competitive bidding will not require
any changes in the applicable formulas for bills.
The sample offering announcements of Treasury auctions in Exhibit A
are also being updated in this final rule to reflect the changes that
have occurred since they were incorporated in the uniform offering
circular. Updated samples for Treasury's quarterly financing, weekly
bills, and CMB auction announcements are included in this final rule
but were not part of the proposed rule.

Procedural Requirements

This final rule does not meet the criteria for a ``significant
regulatory action'' pursuant to Executive Order 12866.
Although this rule was issued in proposed form to secure the
benefit of public comment, the notice and public procedures
requirements of the Administrative Procedure Act are inapplicable,
pursuant to 5 U.S.C. 553(a)(2). As no notice of proposed rulemaking is
required, the provisions of the Regulatory Flexibility Act (5 U.S.C.
601, et seq.) do not apply.
There is no new collection of information contained in this final
rule, and, therefore, the Paperwork Reduction Act does not apply. The
collections of information of 31 CFR part 356 have been previously
approved by the Office of Management and Budget under Sec. 3507(d) of
the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) under
control number 1535-0112. Under this Act, an agency may not conduct or
sponsor, and a person is not required to respond to, a collection of
information unless it displays a valid OMB control number.

List of Subjects in 31 CFR Part 356

Bonds, Federal Reserve System, Government securities, Securities.

Dated: August 6, 1997.
Gerald Murphy,
Fiscal Assistant Secretary.

For the reasons set forth in the preamble, 31 CFR Chapter II,
subchapter B, part 356, is amended as follows:

PART 356--SALE AND ISSUE OF MARKETABLE BOOK-ENTRY TREASURY BILLS,
NOTES, AND BONDS (DEPARTMENT OF THE TREASURY CIRCULAR, PUBLIC DEBT
SERIES NO. 1-93)

1. The authority citation for part 356 continues to read as
follows:

Authority: 5 U.S.C. 301; 31 U.S.C. 3102, et seq.; 12 U.S.C. 391.

2. Section 356.12 is amended by revising paragraph (c)(1)(i) to
read as follows:

Sec. 356.12 Noncompetitive and competitive bidding.

* * * * *
(c) * * *
(1) * * *
(i) Treasury bills. For all bills except cash management bills, a
competitive bid must show the discount rate bid, expressed with three
decimals in .005 percent increments. The third decimal must be either a
zero or a five, e.g., 5.320 or 5.325. Fractions may not be used. For
cash management bills, a competitive bid must show the discount rate
bid, expressed with two decimals in .01 percent increments, e.g., 5.14.
Fractions may not be used.
* * * * *
3. Section 356.13 is amended by revising paragraph (a) to read as
follows:

Sec. 356.13 Net long position.

(a) Reporting net long positions. When bidding competitively, a
bidder must report the amount of its net long position when the total
of all of its bids in an auction plus the bidder's net long position in
the security being auctioned equals or exceeds the net long position
reporting threshold amount. The net long position reporting threshold
amount for any particular security will be as stated in the offering
announcement for that security. (See Sec. 356.10.) That amount will be
$1 billion for bills, and $2 billion for notes and bonds, unless
otherwise stated in the offering announcement. If the bidder either has
no position or has a net short position and the total of all of its
bids equals or exceeds the net long position reporting threshold
amount, e.g., $1 billion for bills and $2 billion for notes and bonds,
a net long position of zero must be reported. In cases where a bidder
that is required to report the

[[Page 43094]]

amount of its net long position has more than one bid, the bidder's
total net long position should be reported in connection with only one
bid. A bidder that is a customer must report its reportable net long
position through only one depository institution or dealer. (See
Sec. 356.14(c).)
* * * * *
4. Appendix B to Part 356, Section III, Paragraphs A and B are
amended by adding a note at the end of each paragraph, respectively, to
read as follows:

Appendix B to Part 356--Formulas and Tables

* * * * *

III. Formulas for Conversion of Inflation-Indexed Security Yields to
Equivalent Prices

* * * * *
A. For inflation-indexed securities with a regular first
interest payment period:
* * * * *
Note: For the real price (P), Treasury has rounded to three
places. These amounts are based on 100 par value.

B. For inflation-indexed securities reopened during a regular
interest period where the purchase price includes predetermined
accrued interest:
* * * * *
Note: For the real price (P), and the inflation-adjusted price
(Padj), Treasury has rounded to three places. For accrued
interest (A) and adjusted accrued interest (Aadj),
Treasury has rounded to six places. These amounts are based on 100
par value.
* * * * *
5. Appendix B to part 356, Section IV, Paragraph C is amended by
revising the note at the end of the paragraph to read as follows:
* * * * *

IV. Computation of Purchase Price, Discount Rate, and Investment Rate
(Coupon-Equivalent Yield) for Treasury Bills

* * * * *
C. Conversion of prices to discount rates for Treasury bills of
all maturities:
* * * * *
Note: Prior to April 18, 1983, all bills were sold in price-
basis auctions, in which discount rates calculated from prices were
rounded to three places, using normal rounding procedures. Since
that time, all bills have been sold only on a discount rate basis.
For regular Treasury bills--13-, 26-, and 52-week bills--discount
rates bid were submitted with two decimals in increments of .01
percent, e.g., 5.32, until 1997, when Treasury instituted a change
to three decimal bidding in increments of .005 percent, e.g., 5.320
or 5.325.
* * * * *
6. Exhibit A to Part 356 is amended by revising the text of
Sections I through III to read as follows:

Exhibit A to Part 356--Sample Announcements of Treasury Offerings to
the Public

* * * * *

I. Treasury Quarterly Financing Announcement

For Release When authorized at Press Conference
February 5, 20XX
Contact: Office of Financing 202/XXX-XXXX

Treasury February Quarterly Financing

The Treasury will auction $17,750 million of 3-year notes,
$12,000 million of 10-year notes, and $10,000 million of 30-year
bonds to refund $18,037 million of publicly-held securities maturing
February 15, 20XX, and to raise about $21,725 million new cash.
In addition to the public holdings, Federal Reserve Banks hold
$1,795 million of the maturing securities for their own accounts,
which may be refunded by issuing additional amounts of the new
securities.
The maturing securities held by the public include $1,654
million held by Federal Reserve Banks as agents for foreign and
international monetary authorities. Amounts bid for these accounts
by Federal Reserve Banks will be added to the offering.
The 10-year note and the 30-year bond being offered today are
eligible for the STRIPS program.
Tenders will be received at Federal Reserve Banks and Branches
and at the Bureau of the Public Debt, Washington, D.C. This offering
of Treasury securities is governed by the terms and conditions set
forth in the Uniform Offering Circular (31 CFR Part 356, as amended)
for the sale and issue by the Treasury to the public of marketable
Treasury bills, notes, and bonds.
Details about the notes and bonds are given in the attached
offering highlights.

Attachment

Highlights of Treasury Offerings to the Public--February 20XX Quarterly Financing
February 5, 20XX

Offering Amount:..................... $17,750 million........ $12,000 million........ $10,000 million
Description of Offering:
Term and type of security........ 3-year note............ 10-year notes.......... 30-year bonds
Series........................... U-20XX................. B-20XX................. Bonds of February 20XX
CUSIP number..................... 912827 XX X............ 912827 XX X............ 912810 XX X
Auction date..................... February 11, 20XX...... February 12, 20XX...... February 13, 20XX
Issue date....................... February 18, 20XX..... February 18, 20XX...... February 18, 20XX
Dated date....................... February 18, 20XX...... February 15, 20XX...... February 15, 20XX
Maturity date.................... February 15, 20XX...... February 15, 20XX...... February 15, 20XX
Interest rate.................... Determined based on the Determined based on the Determined based on the
average of accepted average of accepted average of accepted
competitive bids. competitive bids. competitive bids
Yield............................ Determined at auction.. Determined at auction.. Determined at auction
Interest payment dates........... August 15 and February August 15 and February August 15 and February
15. 15. 15
Minimum bid amount............... $5,000................. $1,000................. $1,000
Multiples........................ $1,000................. $1,000................. $1,000
Accrued interest payable by None................... Determined at auction.. Determined at auction
investor.
Premium or discount.............. Determined at auction.. Determined at auction.. Determined at auction
STRIPS Information:
Minimum amount required.......... Not applicable......... Determined at auction.. Determined at auction
Corpus CUSIP number.............. Not applicable......... 912820 XX X............ 912803 XX X
Due dates and CUSIP numbers for Not applicable......... Not applicable......... February 15, 20XX--
additional TINTs. 912833 XX X
The following rules apply to all securities mentioned above:
Submission of bids:
Noncompetitive bids..............
(2)Accepted in full up to $5,000,000
at the average yield of accepted
competitive bids.
Competitive bids.................
(2)(1) Must be expressed as a yield
with three decimals in increments of
.001%, e.g., 7.123%.

(2)(2) Net long position for each
bidder must be reported when the sum
of the total bid amount, at all
yields, and the net long position is
$2 billion or greater.

(2)(3) Net long position must be
determined as of one half-hour prior
to the closing time for receipt of
competitive tenders.

[[Page 43095]]

Maximum Recognized Bid at a Single
Yield: .
(2) 35% of public offering.
Maximum Award: ......................
(2) 35% of public offering.
Receipt of Tenders:
Noncompetitive tenders...........
(2)Prior to 12:00 noon Eastern
Standard time on auction day.
Competitive tenders..............
(2)Prior to 1:00 p.m. Eastern
Standard time on auction day.
Payment Terms .......................
(2)Full payment with tender or by
charge to a funds account at a
Federal Reserve Bank on issue date.

II. Treasury Weekly Bill Announcement

Embargoed until 2:30 P.M., April 15, 20XX
Contact: Office of Financing, 202/XXX-XXXX

Treasury's Weekly Bill Offering

The Treasury will auction two series of Treasury bills totaling
approximately $12,000 million, to be issued April 24, 20XX. This
offering will result in a paydown for the Treasury of about $6,225
million, as the maturing publicly-held weekly bills are outstanding
in the amount of $18,220 million.
In addition to the public holdings, Federal Reserve Banks for
their own accounts hold $6,558 million of the maturing bills, which
may be refunded at the weighted average discount rate of accepted
competitive tenders. Amounts issued to these accounts will be in
addition to the offering amount.
Federal Reserve Banks hold $3,007 million as agents for foreign
and international monetary authorities, which may be refunded within
the offering amount at the weighted average discount rate of
accepted competitive tenders. Additional amounts may be issued for
such accounts if the aggregate amount of new bids exceeds the
aggregate amount of maturing bills.
Tenders for the bills will be received at Federal Reserve Banks
and Branches and at the Bureau of the Public Debt, Washington, D.C.
This offering of Treasury securities is governed by the terms and
conditions set forth in the Uniform Offering Circular (31 CFR part
356, as amended) for the sale and issue by the Treasury to the
public of marketable Treasury bills, notes, and bonds.
Details about each of the new securities are given in the
attached offering highlights.

Attachment

Highlights of Treasury Offerings of Weekly Bills To Be Issued April 24,
20XX
April 15, 20XX

Offering Amount:................ $6,000 million.... $6,000 million
Description of Offering:
Term and type of security... 91-day bill....... 182-day bill
CUSIP number................ 912794 XX X....... 912794 XX X
Auction date................ April 21, 20XX.... April 21, 20XX
Issue date.................. April 24, 20XX.... April 24, 20XX
Maturity date............... July 24, 20XX..... October 23, 20XX
Original issue date......... July 25, 20XX..... April 24, 20XX
Currently outstanding....... $31,725 million... ..................
Minimum bid amount.......... $10,000........... $10,000
Multiples................... $ 1,000........... $ 1,000
The following rules apply to all
securities mentioned above:
Submission of Bids:
Noncompetitive bids.........
(1)Accepted in full up to
$1,000,000 at the average
discount rate of accepted
competitive bids.
Competitive bids............
(1)(1) Must be expressed as a
discount rate with three
decimals in increments of
.005%, e.g., 7.100%, 7.105%.

(1)(2) Net long position for
each bidder must be reported
when the sum of the total bid
amount, at all discount rates,
and the net long position is $1
billion or greater.

(1)(3) Net long position must be
determined as of one half-hour
prior to the closing time for
receipt of competitive tenders.
Maximum Recognized Bid at a
Single Yield:.
(1)35% of public offering.
Maximum Award:..................
(1)35% of public offering.
Receipt of Tenders:
Noncompetitive tenders......
(1)Prior to 12:00 noon Eastern
Daylight Saving time on auction
day.
Competitive tenders.........
(1)Prior to 1:00 p.m. Eastern
Daylight Saving time on auction
day.
Payment Terms:..................
(1)Full payment with tender or
by charge to a funds account at
a Federal Reserve Bank on issue
date.

III. Treasury Cash Management Bill Announcement

Embargoed until 2:30 p.m., February 25, 20XX
Contact: Office of Financing 202/XXX-XXXX

Treasury to Auction Cash Management Bills

The Treasury will auction approximately $23,000 million of 45-
day Treasury cash management bills to be issued March 3, 20XX.
Competitive and noncompetitive tenders will be received at all
Federal Reserve Banks and Branches. Tenders will not be accepted for
bills to be maintained on the book-entry records of the Department
of the Treasury (TREASURY DIRECT). Tenders will not be received at
the Bureau of the Public Debt, Washington, D.C.
Additional amounts of the bills may be issued to Federal Reserve
Banks as agents for foreign and international monetary authorities
at the average price of accepted competitive tenders.
This offering of Treasury securities is governed by the terms
and conditions set forth in the Uniform Offering Circular (31 CFR
part 356, as amended) for the sale and issue by the Treasury to the
public of marketable Treasury bills, notes, and bonds.
Details about the new security are given in the attached
offering highlights.

Attachment

[[Page 43096]]

Highlights of Treasury Offering of 45-Day Cash Management Bill
February 25, 20XX

Offering Amount........................ $23,000 million.
Description of Offering:...............
Term and type of security.......... 45-day Cash Management Bill.
CUSIP number....................... 912794 XX X.
Auction date....................... February 27, 20XX.
Issue date......................... March 3, 20XX.
Maturity date...................... April 17, 20XX.
Original issue date................ October 17, 20XX.
Currently outstanding.............. $24,724 million.
Minimum bid amount................. $10,000.
Multiples.......................... $1,000.
Minimum to hold amount............. $10,000.
Multiples to hold.................. $1,000.
Submission of Bids:
Noncompetitive bids................ Accepted in full up to
$1,000,000 at the average
discount rate of accepted
competitive bids.
Competitive bids................... (1) Must be expressed as a
discount rate with two
decimals in increments of
.01%, e.g., 7.12%.
(2) Net long position for each
bidder must be reported when
the sum of the total bid
amount, at all discount rates,
and the net long position is
$1 billion or greater.
(3) Net long position must be
determined as of one half-hour
prior to the closing time for
receipt of competitive
tenders.
Maximum Recognized Bid at a Single 35% of public offering.
Yield.
Maximum Award.......................... 35% of public offering.
Receipt of Tenders:
Noncompetitive tenders............. Prior to 11:00 a.m. Eastern
Standard time on auction day.
Competitive tenders................ Prior to 11:30 a.m. Eastern
Standard time on auction day.
Payment Terms.......................... Full payment with tender or by
charge to a funds account at a
Federal Reserve Bank on issue
date.

* * * * *
[FR Doc. 97-21277 Filed 8-11-97; 8:45 am]
BILLING CODE 4810-39-W