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

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