Buying Treasury Securities The Bureau of the PUBLIC DEBIT DEPARTMENT OF THE TREASURY Treasury Securities Many investors continue to be attracted to the safety and convenience of purchasing United States Treasury Bills, Notes and Bonds directly from the Treasury Department This booklet acquaints investors with the basics of marketable Treasury securities and how to purchase and hold these securities in the TREASURY DIRECT system Treasury's Bureau of the Public Debt is committed to offering the very best in customer service to investors in Treasury securities TABLE OF CONTENTS Marketable Treasury Securities Treasury Bills, Notes and Bonds Book-Entry Securities How to Purchase Bills, Notes and Bonds Types of Treasury Auctions General Pattern of Treasury Offerings Prices, Rates and Yields Treasury Direct Investor Account Completing Your TREASURY DIRECT Tender Direct Deposit Payments Reinvestment Options Statement of Account Other Features Transaction Request Fees Taxation Transferring Treasury Securities Smart Exchange Glossary Appendix A Servicing Offices Appendix B Commonly Used Forms Appendix C Registration Options Appendix D Selected Regulations MARKETABLE TREASURY SECURITIES Treasury bills, notes and bonds are sold to the public to pay off maturing debt and raise the cash needed to operate the Federal Government. These marketable securities are available on a regular schedule throughout the year in maturities ranging from 13 weeks to 30 years. The Bureau of the Public Debt issues, services and redeems these securities as part of its mission to finance and account for the public debt. When investors buy Treasury securities, they are lending their money to the U. S. Government. Bills, notes and bonds can be purchased at Treasury auctions directly from Public Debt or from the Federal Reserve Banks and Branches. Treasury marketable securities can also be bought and sold after auction through financial institutions and government securities brokers and dealers. Treasury bills, notes and bonds are issued in safe, convenient book-entry form whether they are held directly in Public Debt's TREASURY DIRECT system or in the commercial book-entry system by financial institutions or government securities brokers or dealers on behalf of investors Treasury Bills, Notes and Bonds The Bureau of the Public Debt issues three types of marketable securities: bills, notes and bonds. These securities are direct obligations of the United States Government. Treasury bills, notes and bonds are sold through competitive and non-competitive bidding at more than 150 auctions held throughout the year. They are called marketable securities because after original issue they can be bought or sold in the secondary (commercial) market at prevailing market prices through financial institutions and government securities brokers and dealers Treasury bills, notes and bonds cannot be redeemed before maturity unless, by the terms of their issue, they are callable. Some Treasury bonds issued before 1985 are subject to call by the Treasury Department before their final maturity. If called, these bonds stop earning interest on the date called TREASURY BILLS Treasury bills are short-term obligations issued with a term of one year or less. Treasury bills are sold at a discount from face value (par) and do not pay interest before maturity. The difference between the purchase price of the bill and the amount that is paid at maturity (par), or when the bill is sold prior to maturity, is the interest earned on the bill. TREASURY NOTES AND BONDS Treasury notes and bonds bear a stated interest rate, and the owner receives semi-annual interest payments. Treasury notes have a term of more than one year, but not more than ten years. Treasury bonds are long-term obligations issued with a term of more than ten years. The details of each issue of bills, notes or bonds are announced before the auction. Book-Entry Securities Book-entry securities are held in accounts on the records of the Bureau of the Public Debt, a Federal Reserve Bank, a financial depository institution, or other custodian. With safe, convenient book-entry Treasury securities, interest and principal payments are made automatically. TREASURY DIRECT SYSTEM TREASURY DIRECT is the book-entry system operated by the Bureau of the Public Debt. TREASURY DIRECT is designed for investors who purchase Treasury securities and intend to hold them until maturity. Investors can open and maintain their TREASURY DIRECT accounts at any of the 36 Federal Reserve Bank or Branch servicing offices located throughout the country, or at Public Debt. Investors can establish a single TREASURY DIRECT account for all marketable Treasury securities with the same ownership and hold all their bills, notes or bonds in the master account. Investors receive a TREASURY DIRECT Statement of Account when their securities are issued, reinvested or if changes are made to their account. TREASURY DIRECT principal and interest payments are made electronically by direct deposit to an account at a financial institution designated by the investor. Some financial institutions will submit your application for Treasury securities in TREASURY DIRECT for you. This applies to both new and existing accounts. They will forward your application to a Federal Reserve Bank to purchase your securities in the TREASURY DIRECT system. Contact your local financial institution for more information on this procedure. Securities held in TREASURY DIRECT cannot be pledged as collateral or sold within the system. Investors wishing to sell or pledge their bills, notes or bonds must first transfer the securities to the commercial book-entry system. Commercial Book-Entry System The commercial book-entry system is operated by the Federal Reserve Banks in their capacity as fiscal agents of the Treasury. Investors who maintain their securities in this system generally have purchased them through a financial institution or a government securities broker or dealer. These securities are recorded in the commercial book-entry system as book-entry issues held for the account of a depository institution. The depository institution maintains records identifying the owners of the securities held in its account in the commercial book-entry system. Investors can transfer most types of Treasury securities purchased or held in the commercial system to TREASURY DIRECT. Investors cannot transfer Treasury STRIPS into TREASURY DIRECT. STRIPS are zero-coupon instruments created by the secondary market by separating and trading the interest and principal components of certain Treasury notes and bonds. HOW TO PURCHASE BILLS, NOTES AND BONDS The Department of the Treasury issues a press release about one week before each auction announcing the auction date, amount to be sold, and other details of the securities to be issued. Investors are invited to submit bids by paper or electronic tender by a specified time on the day of the auction. There are two types of bids. Noncompetitive Bid: The investor agrees to accept a rate determined by the auction, and in return is guaranteed a security. Most individual investors submit noncompetitive bids. Competitive Bid: The investor submits a tender specifying a discount rate to two decimal places for a bill auction, e.g., 5.12%, or specifying a yield to three decimal places for a note or bond auction, e.g., 5.123%. Common fractions may not be used. If the bid falls within the range accepted at auction, the investor will be awarded the security. If the bid is at the high rate or yield, the investor may not be awarded the full amount bid. Competitive bidders may have their bids rejected and, in multiple-price auctions, may pay a higher price for the security than the noncompetitive price. (See “Types of Treasury Auctions” on page 8.) Investors who desire to bid competitively in an auction should contact a Federal Reserve Bank servicing office or the Bureau of the Public Debt for further information. The minimum purchase amount for bills is $10,000. Bids for more than $10,000 must be in multiples of $1,000. Noncompetitive bids from a single bidder may not exceed $1,000,000 for the same offering of Treasury bills. Treasury notes with maturities of less than five years must be purchased in minimum amounts of $5,000 and in multiples of $1,000. Notes with maturities between five and ten years and bonds are sold in minimum amounts of $1,000 and in multiples of $1,000. Noncompetitive bids from a single bidder may not exceed $5,000,000 for the same offering of Treasury notes or bonds. Tender forms and payment may be submitted directly to your nearest Federal Reserve Bank or Branch, or to the Bureau of the Public Debt. Tenders must be received by the time stated in the offering announcement. Generally, the deadlines are prior to 12:00 noon Eastern time on the auction day for hand-delivered noncompetitive bids and prior to 1:00 pm Eastern time on the auction day for competitive bids. Noncompetitive bids which are mailed must be post-marked by the day prior to the auction and be received by the issue date of the security. Tender forms and payment may also be submitted electronically through your financial institution or government securities broker or dealer. These organizations generally require earlier submissions, so they have time to transmit your request for purchase to a Federal Reserve Bank or Branch by the deadline. Types of Treasury Auctions The auction is the bidding process by which the Treasury sells its marketable securities to the public. Two types of auctions are now used to sell securities. Multiple-Price Auction: In this type of auction, each successful competitive bidder purchases securities at the price equivalent to the rate or yield bid. Noncompetitive bidders purchase securities at the price equivalent to the weighted average rate or yield of accepted competitive bids. This type of auction is used for all bill and bond auctions, and also for auctions of 3-year and 10-year notes. Single-Price Auction: In this type of auction, each successful competitive bidder and each noncompetitive bidder is awarded securities at the price equivalent to the highest accepted rate or yield. This type of auction is used for the 2-year and 5-year note auctions. General Pattern of Treasury Offerings The Treasury Department must issue many bills, notes and bonds each year to finance the public debt. In doing so, it follows a regular pattern of securities sales as one way of assuring that the market will actively bid for these securities. The table on the following page illustrates the general pattern of securities offerings. While this table provides a reference for when securities are likely to be sold, an offering of securities is not official until Treasury makes a public announcement (press release) of the details of the issue. Treasury financing policy decisions and borrowing requirements sometimes result in changes to the regular pattern of financing. Up-to-date information on upcoming bill, note or bond auctions is available from Federal Reserve Banks or the Bureau of the Public Debt. Many newspapers also report auction schedules. TREASURY BILLS 13-week and 26-week bills are offered each week. Except for holidays or special circumstances, the offering is announced on Tuesday, the bills are auctioned the following Monday, and they are issued on the Thursday following the auction. 52-week bills are usually offered every four weeks. Except for holidays or special circumstances, the offering is announced on a Friday, the bills are auctioned the following Thursday, and they are issued on the Thursday following the auction. Cash Management bills are offered from time to time, depending on borrowing needs. The time between announcement, auction, and issue is usually short (1-7 days). Cash Management bills can only be purchased through financial institutions and government securities brokers and dealers. Once purchased, they can usually be transferred into the TREASURYDIRECT system. TREASURY NOTES AND BONDS 2-year notes and 5-year notes are issued once a month. The notes are generally announced near the middle of each month and auctioned one week later. They are usually issued on the last day of each month. If the last day of the month is a Saturday, Sunday, or Federal holiday, the securities are issued on the next business day. 3-year note and 10-year note auctions are usually announced on the first Wednesday of February, May, August, and November. The notes are generally auctioned during the second week of those months, and issued on the 15th. If the 15th falls on a Saturday, Sunday, or Federal holiday, the securities are issued on the next business day. 30-year bond auctions are usually announced, along with 3-year and 10-year notes, on the first Wednesday of February and August. The bonds are generally auctioned during the second week of those months and issued on the 15th. If the 15th falls on a Saturday, Sunday, or Federal holiday, the securities are issued on the next business day. Prices, Rates and Yields Treasury bill auction results provide information about the range of accepted discount rates and their equivalent prices and investment rates. The discount rate is an annualized rate of return based on the par value of the bills. The investment rate, or equivalent coupon yield, is an annualized rate based on the purchase price of the bills and reflects the actual yield to maturity. Both rates are calculated on the actual number of days to maturity. The discount rate is calculated on a 360-day basis (twelve 30-day months). The investment rate or equivalent coupon yield is calculated on a 365-day basis (or on a 366-day basis during leap year). Treasury note and bond auction results provide information about the annual interest rate and the yield to maturity. When the price of a note or bond is less than par, the investor will receive a refund, or discount, which is the difference between the purchase price and par. When the price is over par, the investor will be required to pay a premium, which is the difference between par and the purchase price. While discount or premium affects the overall return to an investor, it does not affect the stated interest rate the Treasury will pay investors on an annual basis. Discounts less than $1.00 will not be paid unless a written request is submitted to the servicing office that processed the tender. Premiums less than $1.00 will not be collected. Under some circumstances, the investor may be required to pay accrued interest if the security pays interest income for a period prior to the issue date. The accrued interest is subsequently returned as part of the first interest payment. TREASURY DIRECT INVESTOR ACCOUNT For each purchaser of marketable Treasury securities in TREASURY DIRECT, the Treasury Department establishes an Investor Account. Actually, purchasers automatically request that an Investor Account be established when they complete their first tender form used for the purchase of a security. Investors may also establish an Investor Account by submitting a PD F 5182, “New Account Request.” Once established, in either manner, this account serves as a single account for all the investor's marketable Treasury securities eligible to be maintained in TREASURY DIRECT. Different registrations and account information require establishment of separate TREASURY DIRECT accounts. With the TREASURY DIRECT system, investors will have access to their accounts at any Federal Reserve Bank or Branch or the Bureau of the Public Debt. Although an investor may own several marketable Treasury securities, including bills, notes and bonds, the details on these holdings are maintained under the Investor Account portfolio, and whenever certain transactions occur within this account, the investor will be sent a Statement of Account showing the transaction. The Investor Account includes, but is not limited to, the following information: 1. The TREASURY DIRECT account number; 2. The taxpayer identification number (Social Security number or employer identification number); 3. The exact form of registration in which the securities are held; 4. The investor's address for the account; and 5. Direct deposit information (investor's account at a financial institution). COMPLETING YOUR TREASURY DIRECT TENDER As the first step in purchasing Treasury securities either from a Federal Reserve Bank or Branch or from the Bureau of the Public Debt, an investor must complete and submit a tender form (shown below). The tender form has two copies, one of which is to be retained by the purchaser. TENDER INFORMATION AMOUNT OF TENDER: Enter the total face or par amount of the security you are offering to buy. (See the text on page 7 and the chart on page 9 for information regarding minimum purchase amounts and allowable multiples.) BID TYPE: Noncompetitive Check this box if you are offering to purchase the security at the price equivalent to a market-based rate to be determined at the auction. Competitive Check this box if you are offering to purchase the security at a price equivalent to a specific annual discount rate/yield. For all bill auctions, discount rate bids must be expressed with two decimals, e.g., 4.25%. For note and bond auctions, yield bids must be expressed with three decimals, e.g., 4.256%. Caution: If you bid competitively, your tender may be rejected or, in multiple price auctions, your tender could be accepted at a rate much lower than the weighted average rate. Note: If you do not check either box or state a discount rate or yield, your tender is considered a noncompetitive bid. Most individual investors submit noncompetitive bids. ACCOUNT NUMBER If the securities are to be added to an existing TREASURY DIRECT account, enter the ACCOUNT NUMBER in the space provided. This number can be found on your TREASURY DIRECT Statement of Account. If no ACCOUNT NUMBER is furnished, a new account will be opened. If you provide your ACCOUNT NUMBER, you only need to complete the following sections of the form: TENDER INFORMATION, ACCOUNT NAME under INVESTOR INFORMATION, TAXPAYER IDENTIFICATION NUMBER, PAYMENT ATTACHED, AUTHORIZATION, and if you wish to request reinvestment (bill tenders only), AUTOMATIC REINVESTMENT. INVESTOR INFORMATION ACCOUNT NAME: Enter the name(s) of the owner(s) for whom the TREASURY DIRECT account will be established. If your tender is for an existing account, enter the name(s) from the Statement of Account. Accounts may be established in the name(s) of one or two individuals, an estate, a trust, corporation, association, natural guardian, etc. (See Appendix C on pages 32-35 for examples and options.) ADDRESS: Provide a complete address, including zip code. This is where Statements of Account and other correspondence will be sent. Do not use a tender form to change an address on an existing account. To change an address, use PD F 5178, Transaction Request, or a letter. TAXPAYER IDENTIFICATION NUMBER Provide the taxpayer identification number required on tax returns and other documents submitted to the Internal Revenue Service. For individuals, this is the social security number (SSN) of the person whose name appears FIRST on the account. The SSN of a minor or incompetent is required for accounts established in a fiduciary capacity for these individuals. In the case of a partnership, company, organization or trust, the employer identification number (EIN) assigned by the IRS is used. Note: Resident and nonresident aliens need not complete this area. The Bureau of the Public Debt will request certification of foreign status and withhold tax accordingly. TELEPHONE NUMBERS Please provide the telephone numbers (including area codes) where you can be contacted during normal business hours if there are questions about your tender or account. PAYMENT ATTACHED Enter the total payment you are submitting and list the individual amounts by payment type (CASH, CHECKS, SECURITIES, OTHER). If more than one check is submitted, list the amount of each check separately. The total payment attached should equal the par amount of the tender.PAYMENT: The tender, or offer, must be signed and submitted with full payment to the nearest Federal Reserve Bank or Branch, or to Public Debt's Capital Area Servicing Center. These addresses and telephone numbers are listed on pages 27-30. Payment may be made in any of the following ways: 1. By personal checks or checks issued by banks, savings and loan associations, credit unions, or other financial organizations: 2. EXCEPTIONS: a) No two-party checks will be accepted. b) Personal checks submitted in payment for Treasury bills must be certified. 3. By cash (United States currency) presented in person. 4. By definitive Treasury securities maturing on or before the issue date. 5. By a check issued by the Treasury Department or a Federal Reserve Bank in payment of a matured Treasury obligation, provided that the tender is submitted in the same name(s) as the payee(s) of the check and the check is not stale-dated. Personal or financial organization checks must be made payable to the institution to which they are submitted (for example, to a Federal Reserve Bank or Branch, or to the Bureau of the Public Debt).Checks submitted to the Bureau of the Public Debt that are made payable to a Federal Reserve Bank or Branch are not acceptable. Any such check sent to the Bureau of the Public Debt will cause the tender to be rejected. Likewise, checks submitted to a Federal Reserve Bank or Branch that are made payable to the Bureau of the Public Debt are not acceptable. DIRECT DEPOSIT INFORMATION (All payments are made by Direct Deposit.) To establish direct deposit for investment payments, investors must enter the following information on the tender form: ROUTING NUMBER (your financial institution's ABA number); FINANCIAL INSTITUTION NAME (the name of the institution to which payments are to be made); NAME ON ACCOUNT (your name as it appears on the account at your financial institution); ACCOUNT TYPE (checking or savings); ACCOUNT NUMBER (your account number at your financial institution). For more detailed instructions regarding NAME ON ACCOUNTand ROUTING NUMBER, see Direct Deposit Payments on pages 20-21. AUTOMATIC REINVESTMENT You may request that a Treasury bill be reinvested non-competitively when it matures. (This option is not available for notes and bonds.) Circle the number of reinvestments you wish to request at this time. A 13-week bill may be scheduled for up to 8 consecutive 13-week reinvestments. A 26-week bill may be scheduled for up to 4 consecutive 26-week reinvestments. A 52-week bill may be scheduled for 1 or 2 consecutive 52-week reinvestments. AUTHORIZATION Sign and date the tender. Tenders in the names of two individuals can be signed by either. However, if the second-named owner signs, then IRS Form W-9, signed by the first-named owner, must be submitted with the tender. If the IRS has notified you that you are subject to backup withholding and you have not received notice from the IRS that the withholding has terminated, you should strike out the language certifying that you are not subject to withholding. SUBMISSION: Submit the tender to the Federal Reserve Bank or Branch serving your geographic area, or if you live in the metropolitan Washington, DC area, to the Bureau of the Public Debt, Capital Area Servicing Center. To be considered for a given offering, a competitive bid must be received by the time designated in the offering announcement. Noncompetitive tenders that are post-marked no later than midnight the day before the auction and received on or before the issue date of the securities being offered will be accepted. Tenders for 13-week and 26-week bills that are received after the issue date will be placed in the next auction. Tenders for 52-week bills or notes or bonds that are received after the issue date will be rejected and returned to the investor. CONFIRMATION OF ACCEPTED TENDERS: You will receive a TREASURY DIRECT Statement of Account confirming the issue of securities in your account. You may also receive either a discount payment or a premium notice, representing the difference between the amount you submitted and the cost of the security. DIRECT DEPOSIT PAYMENTS Investors in Treasury securities held in the TREASURY DIRECT system do not receive check payments. All payments (refunds, interest, and principal) are made by direct deposit. Payments are automatically deposited to an account that the investor designates at his or her financial institution. Direct deposit offers investors a safe and convenient method for receiving payments from Treasury investments. By having refunds, interest and redemption payments directly deposited into an account at a financial institution, investors don't need to worry about lost or stolen checks, or having to stand in line at a financial institution to cash or deposit checks. Your designated financial institution will provide a periodic statement confirming all deposits. When individuals first purchase Treasury securities under TREASURY DIRECT, thus setting up a new TREASURY DIRECT account, they will be asked to specify a checking, savings or share account number into which payments from their investments can be deposited. Once this account is specified, the TREASURY DIRECT system will notify the institution that it will be receiving electronic payments of funds for the account that has been designated. Each time a payment is made, it will be deposited directly into this account. Direct deposit is specified as part of the terms and conditions of securities offered in TREASURY DIRECT. Payments will be made by check (on new accounts only) if a payment is due to you before we have confirmed direct deposit arrangements for your account at the financial institution. If both the TREASURY DIRECT account and the receiving financial institution account are in the names of individuals, then at least one of the individuals named on the TREASURY DIRECT account must also be named on the deposit account at the receiving financial institution. The ROUTING NUMBER can be obtained from the institution or found on the bottom line of a check or deposit slip. When providing your account number, please include hyphens. A hyphen is represented on a check or deposit slip by the symbol '''. (See example below.) Payment instructions for an investor's TREASURY DIRECT account will apply to any and all securities held in that account until the Bureau of the Public Debt or any Federal Reserve Bank or Branch receives: 1. A request from the owner to change such instructions on PD F 5178, Transaction Request; or 2. A request from a financial institution to change such instructions (e.g., because of a merger); or 3. Advice from the financial institution holding the deposit account to which payment is being made that the account has been closed; or 4. Notice of a change in status of a designated account owner (e.g., owner is deceased). REINVESTMENT OPTIONS BILLS In TREASURY DIRECT, an investor may request multiple automatic reinvestments of 13, 26 or 52-week bills for up to 2 years after the first maturity date, without having to complete additional reinvestment requests. The request for extended non-competitive reinvestment is made on the tender at the time of original purchase. BILLS, NOTES AND BONDS If an investor is holding a bill, note or bond which is currently not scheduled for reinvestment, a reminder will be mailed indicating that the security is about to mature. The notice will list available reinvestment options for the security, and will provide the specific date by which the attached form must be returned to request reinvestment. The request to reinvest a maturing security must be received at least 20 calendar days prior to the maturity of the security. Redemption will occur automatically if the notice is not returned or is returned after the specified date. If an investor wishes to reinvest only part of the proceeds of the maturing security, then PD F 5262, Treasury Note or Bond Reinvestment Request, or PD F 5180, Treasury Bill Reinvestment Request, should be obtained from a Federal Reserve Bank or Branch or from the Bureau of the Public Debt. When the new security is issued, you will receive a Statement of Account showing any change in the security (par) amount or number of scheduled reinvestments. The new security usually will not have the same price and rate of return as the matured security Scheduled reinvestments may be cancelled or changed any time up to 20 calendar days before the reinvestment is scheduled to occur. STATEMENT OF ACCOUNT The TREASURY DIRECT system sends a Statement of Account to an investor whenever : (1) a new Investor Account is established; or (2) the investor purchases marketable Treasury securities in TREASURY DIRECT; or (3) a change is made to Investor Account information. Statements of Account are not sent when interest is paid. The Statement of Account serves as a portfolio of all the investor's holdings in marketable Treasury securities held in the TREASURY DIRECT Investor Account. The statement simplifies the investor's record keeping and offers built-in flexibility since changes to the details of the account information can be made very quickly. The statement will normally be sent to the correspondence address designated in the Investor Account. Whenever the statement is issued as a result of a change in ownership of a security, statements will be sent, where appropriate, to both the former and current owners. OTHER FEATURES Transaction Request A transaction request is a request by the owner/investor to have a change made in his or her Investor Account or securities portfolio. A transaction request must be submitted on a PD F 5178, Transaction Request. In the case of certain transactions specified by the Bureau of the Public Debt, the owner's signature on the form must be properly certified. For the purpose of a transaction request affecting payment instructions with respect to a security, a properly certified request must be received no later than 20 calendar days preceding the next payment date. If a transaction request is received too late for completion of the requested transaction, the transaction request will be acted upon with respect to subsequent payments only. Some transaction requests have to be submitted with evidence, such as a death certificate. In order for Public Debt to process these requests we must receive the evidence at least 20 calendar days before the maturity date of a security. If, for some reason, the payment of the security has to be suspended, Public Debt will redeem the security and hold the redemption proceeds in the same registration as the security that matured until the case can be resolved. No interest is paid or accrued on such proceeds after a security is redeemed. Transaction requests and requests for forms and information may be sent to any Federal Reserve Bank or Branch, or the Capital Area Servicing Center. Fees Beginning in 1995, fees are now assessed for annual maintenance for certain TREASURY DIRECT securities accounts. Each TREASURY DIRECT Investor Account which exceeds $100,000 in par value is charged an annual fee of not less than $25.00. It is imposed in May of each year. The determination as to the exact amount of the fee is made annually. A bill is mailed to the investor for each account subject to the fee. The annual fee in 1995 was $25.00. The fees are authorized by Public Law 103-329. Taxation Treasury securities are subject to all Federal taxes, such as income tax, estate, gift or excise taxes, and may also be subject to Federal withholding tax where applicable. Interest earned on Treasury securities is exempt from state and local income taxes. INTEREST INCOME REPORTING: The Bureau of the Public Debt reports annually to the Internal Revenue Service all semi-annual interest payments on Treasury notes and bonds and all interest earned on Treasury bills. IMPORTANT NOTES: (1) The interest earned on Treasury bills is reported for the year in which the bills mature. (2) If interest income on Treasury notes or bonds is scheduled to be paid on December 31, and that date falls on a non-business day, the income will be reported as earned on the first Federal banking day of the following year. BROKER REPORTING: The Bureau of the Public Debt reports annually to the Internal Revenue Service the par amount of matured Treasury securities that were established in the TREASURY DIRECT system later than 25 days after original issue. The Bureau of the Public Debt also reports the par amount of matured Treasury securities held in TREASURY DIRECT where a change was made in the taxpayer identification number or where a transfer of securities from one TREASURY DIRECT Investor Account to another has occurred during the life of the securities. For more information on tax reporting in relation to Treasury securities, contact your nearest Internal Revenue Service office. Transferring Treasury Securities TREASURY DIRECT accounts are designed for those investors who plan to hold their securities from issue to maturity. An investor may, however, transfer securities to the commercial book-entry system or between existing TREASURY DIRECT accounts. In order to do this, an investor must submit a properly certified PDF5179, Security Transfer Request, to his or her local servicing office. To transfer marketable Treasury securities from the commercial book-entry system, an investor must first establish a TREASURY DIRECT account.The investor can then request the transfer of securities to the TREASURY DIRECT account through a financial institution or government securities broker or dealer. To establish a TREASURY DIRECT account prior to a purchase or transfer, you need to complete a PD F 5182, New Account Request. This form is not needed if you are submitting a tender. Smart Exchange Owners of definitive/paper registered and bearer Treasury securities are encouraged to make the Smart Exchange by converting their notes and bonds to book-entry. For more information about conversion, call the Smart Exchange on 1-800-366- 3144. Glossary Bill A short-term direct obligation of the U.S. Treasury; 13, 26, or 52-week maturity. Note A medium-term direct obligation of the U.S. Treasury; 2 through 10-year maturities. Bond A long-term direct obligation of the U.S. Treasury; 30-year maturity. Auction Sealed bid public sale of Treasury securities; method of determining the rate or yield. TREASURY Book-entry securities system maintained by the DIRECT U.S. Treasury, Bureau of the Public Debt. Book-Entry Securities maintained as computer records rather than in paper form; engraved certificates are no longer issued for new purchases. Premium on The amount by which the auction price of a note Notes and or bond is higher than the par value. In such Bonds cases, you will receive an Amount Due Notice for the difference. Discount on The amount by which the auction price of a Bills, Notes bill, note or bond is lower than the par value. and Bonds In such cases, you will receive payment for the difference. Tender An application or offer to purchase a U.S. Treasury Bill, Note or Bond. Marketable Treasury bills, notes and bonds that are securities transferable and may be sold in the secondary securities market. Nonmarketable U.S. Savings (EE, HH) and Retirement Plan securities series notes and bonds among others. These registered securities are nontransferable and may not be traded in the secondary securities market. Zero Also known as STRIPS (Separate Trading of Coupons Registered Interest and Principal of Securities). The body of a stripped security and the separate coupons are known as zero coupons because there are no periodic interest payments on each piece. After stripping, each piece trades in the secondary securities market. Servicing Offices When you call or visit: When you write: FRB 104 Marietta Street,NW Securities Service Dept Atlanta Atlanta, Georgia 104 Marietta Street, NW 404-521-8657 (Recording) Atlanta, GA 404-521-8653 30303 FRB 502 South Sharp Street P.O. Box 1378 Baltimore Baltimore, Maryland Baltimore, MD 410-576-3500 Recording) 21203 410-576-3300 FRB 1801 Fifth Avenue, North P.O Box 830447 Birmingham Birmingham, Alabama Birmingham, AL 205-731-8702 (Recording) 35283-0447 205-731-8708 FRB 600 Atlantic Avenue P.O. Box 2076 Boston Boston, Massachusetts Boston, MA 617-973-3800 (Recording) 02106 617-973-3810 FRB 160 Delaware Avenue P.O. Box 961 Buffalo Buffalo, New York Buffalo, NY 716-849-5158 (Recording) 14240-0961 716-849-5000 FRB 530 East Trade Street P.O. Box 30248 Charlotte Charlotte, North Carolina Charlotte, NC 704-358-2424 (Recording) 28230 704-358-2100 FRB 230 South LaSalle Street P.O. Box 834 Chicago Chicago, Illinois Chicago, IL 312-786-1110 (Recording) 60690 312-322-5369 FRB 150 East Fourth Street P.O. Box 999 Cincinnati Cincinnati, Ohio Cincinnati, OH 513-721-4794 Ext 334 45201 FRB 1455 East Sixth Street P.O. Box 6387 Cleveland Cleveland, Ohio Cleveland, OH 216-579-2490 (Recording) 44101 216-579-2000 FRB 2200 North Pearl Street Box 655906 Dallas Dallas, Texas Dallas, TX 214-922-6100 75265-5906 214-922-6770 (Recording) FRB 1020 16th Street P.O. Box 5228 Denver Denver, Colorado Denver, CO 303-572-2475 (Recording) 80217-5228 303-572-2470 or 2473 FRB 160 West Fort Street P.O. Box 1059 Detroit Detroit, Michigan Detroit, Ml 313-963-4936 (Recording) 48231 313-964-6157 FRB 301 East Main P.O. Box 100 El Paso El Paso, Texas El Paso, TX 915-521-8295 (Recording) 79999 915-521-8272 FRB 1701 San Jacinto Street P.O. Box 2578 Houston Houston, Texas Houston, TX 713-659-4433 77252 FRB 800 West Water Street P.O. Box 2499 Jacksonville Jacksonville, Florida Jacksonville, FL 904-632-1178 (Recording) 32231-2499 904-632-1179 FRB 925 Grand Avenue P.O. Box 419033 Kansas City Kansas City, Missouri Kansas City, MO 816-881-2767 (Recording) 64141-6033 816-881-2883 FRB 325 West Capitol Avenue P.O. Box 1261 Little Rock Little Rock, Arkansas Little Rock, AR 501-324-8274 (Recording) 72203 501-324-8272 FRB 950 South Grand Avenue P.O. Box 2077 Los Angeles Los Angeles, California Terminal Annex 213-624-7398 Los Angeles, CA 90051 FRB 410 South Fifth Street P.O. Box 32710 Louisville Louisville, Kentucky Louisville, KY 502-568-9240 (Recording) 40232 502-568-9238 FRB 200 North Main Street P.O. Box 407 Memphis Memphis, Tennessee Memphis, TN 901-523-9380 (Recording) 38101 901-523-7171 Ext. 423 FRB 9100 NW Thirty-Six Street P.O. Box 520847 Miami Miami, Florida Miami, FL 305-471-6257 (Recording) 33152 305-471-6497 FRB 250 Marquette Avenue 250 Marquette Ave. Minneapolis Minneapolis, Minnesota Minneapolis, MN 612-340-2051 (Recording) 55480 612-340-2075 FRB 301 Eighth Avenue, North 301 Eighth Ave., N. Nashville Nashville, Tennessee Nashville, TN 615-251-7236 (Recording) 37203-4407 615-251-7100 FRB 525 St. Charles Avenue P.O. Box 52948 New Orleans New Orleans, Louisiana New Orleans, LA 504-593-5839 (Recording) 70152-2948 504-593-3200 FRB 33 Liberty Street Federal Reserve New York New York, New York P.O. Station 212-720-5823 (Recording) New York, NY 212-720-6619 10045 FRB 226 Dean A McGee Avenue P.O. Box 25129 Oklahoma City Oklahoma City, Oklahoma Oklahoma City, OK 405-270-8660 (Recording) 73125 405-270-8652 FRB 2201 Farnam Street 2201 Farnam Street Omaha Omaha, Nebraska Omaha, NE 402-221-5638 (Recording) 68102 402-221-5636 FRB Ten Independence Mall P.O. Box 90 Philadelphia Philadelphia, Pennsylvania Philadelphia, PA 215-574-6580 (Recording) 19105 215-574-6680 FRB 717 Grant Street P.O. Box 867 Pittsburgh Pittsburgh, Pennsylvania Pittsburgh, PA 412-261-7988 (Recording) 15230-0867 412-261-7802 FRB 915 S.W. Stark Street P.O. Box 3436 Portland Portland, Oregon Portland, OR 503-221-5931 (Recording) 97208-3436 503-221-5932 FRB 701 East Byrd Street P.O. Box 27622 Richmond Richmond, Virginia Richmond, VA 804-697-8355 (Recording) 23261 804-697-8372 FRB 120 South State Street P.O. Box 30780 Salt Lake City Salt Lake City, Utah Salt Lake City, UT 801-322-7844 (Recording) 84130-0780 801-322-7882 FRB 126 East Nueva Street P.O. Box 1471 San Antonio San Antonio, Texas San Antonio, TX 210-978-1330 (Recording) 78295 210-978-1303 or 1305 FRB 101 Market Street P.O. Box 7702 San Francisco San Francisco, California San Francisco, CA 415-974-3491 (Recording) 94120 415-974-2330 FRB 1015 Second Avenue P.O. Box 3567 Seattle Seattle, Washington Seattle, WA 206-343-3615 (Recording) 98124 206-343-3605 FRB 411 Locust Street P.O. Box 14915 St. Louis St. Louis, Missouri St. Louis, MO 314-444-8703 63178 Public Debt * Capital Area Capital Area Washington, DC Servicing Center Servicing Center 1300 C Street, S.W. Bureau of the Public Debt Washington, DC Washington, DC 202-874-4000 20239-0001 Device for hearing Mail Tenders to: impaired: Capital Area Servicing Center 202-874-4026 Breau of the Public Debt Department N Washington, DC 20239-1500 *This servicing office only serves customers residing in the metropolitan Washington, DC area Commonly Used Forms PD F 5175 Instructions for Completing a Treasury Bill Tender PD F 5176-1 13-Week Treasury Bill Tender PD F 5176-2 26-Week Treasury Bill Tender PD F 5176-3 52-Week Treasury Bill Tender PD F 5173 Instructions for Completing a Treasury Note or Bond Tender PD F 5174-1 2-3 Year Treasury Note Tender PD F 5174-3 5-10 Year Treasury Note Tender PD F 5174-4 30-Year Treasury Bond Tender PD F 5177 Statement of Account PD F 5178 Transaction Request PD F 5179 Security Transfer Request PD F 5180 Treasury Bill Reinvestment Request PD F 5182 New Account Request PD F 5186 1099 Interest Income PD F 5187 1099B Payments from Broker and Barter Exchange Transactions PD F 5188 Power of Attorney for Dispostion of Securities PD F 5189 Resolution for Disposition of Securities PD F 5191 Application for Recognition as Natural Guardian of a Minor PD F 5192 Stop Payment/Replacement Check Request PD F 5201 Disposition of Payments and Securities for Non- Administered Estates PD F 5207 Income Subject to Withholding Under Chapter 3 Internal Revenue Code PD F 5262 Reinvestment Request for Treasury Notes or Bonds PD F 5330 Treasury Direct Account Number Registration Options Investors in marketable Treasury securities have a broad choice of registration options under TREASURY DIRECT which are designed to address their needs and ownership situations. These options establish clear ownership and survivorship rights. TITLE DESCRIPTION EXAMPLE TAX INFO. SINGLE OWNERSHIP Account in the name of one MARY BENSON DOE 123-45-6789 SSN individual. The name should JANE A. DOE 123-45-6789 SSN be in the form ordinarily used by the investor preferably including at least one full given name. JOINT OWNERSHIP Account in the names of two ELIZABETH BLACK AND 123-45-6789 *SSN WITH RIGHT OF individuals, joined by the JANE BROWN *Tax ID of first SURVIVORSHIP word and, ending with with WITH RIGHT OF named right of survivorship. SURVIVORSHIP Transaction requests must be signed by both owners. This form of registration creates a conclusive right of survivorship. JOINT OWNERSHIP Account in the name of two JOHN B BUTTE AND 123-45-6789 *SSN WITHOUT THE individuals, joined by the MARY B DOE WITHOUT Tax ID of first RIGHT OF word and ending with without RIGHT OF SURVIVORSHIP named SURVIVORSHIP right of survivorship. Transaction requests must be signed by both owners. This form of ownership does not create a right of survivorship. The share of the decedent passes to his or her estate. CO-OWNERSHIP Account in the name of two JAMES BLACK OR 123-45-6789 *SSN individuals, joined by the CAROLYN BLACK *Tax ID of first word or. Transaction requests named may be signed by either co-owner. This form of registration creates a conclusive right of survivorship. BENEFICIARY Account in the name of one GEORGE SMITH PAYABLE 123-45-6789 *SSN individual, followed by the ON DEATH TO (OR POD) words payable on death to or U.S. TREASURY POD another individual or the (31 USC 3113) United States Treasury (proceeds would then be used JANE INVESTOR POD 123-45-6789 *SSN to reduce the public debt). JUNIOR INVESTOR, *Tax ID of the If a minor or an incompetent A MINOR owner is named as beneficiary, the beneficiary's status must be identified in the registration. Transaction requests may be signed by the owner and do not require the consent of the beneficiary. Ownership rights are transferred to the beneficiary only after the death of the owner. NATURAL Registration in the name of a MICHAEL JONES, AS 123-45-6789 *SSN GUARDIAN natural guardian of a minor (a GUARDIAN OF *Tax ID of the minor, security may not be registered ALICE JONES, if minor is sole in the name of a minor in his A MINOR owner. or her own right). Transaction requests may be signed by the guardian on behalf of the minor until the qualification of a legal guardian or similar representative, or the minor's attainment of majority. CUSTODIAN Registration under an VIRGINIA MCDONALD, AS 123-45-6789 *SSN applicable gifts to minors CUSTODIAN FOR LYNNE *Tax ID of the minor statute. Any request to alter BUTTE UNDER THE the ownership rights must be NEW YORK UNIFORM made as provided in the GIFTS TO MINORS ACT applicable statute. (Ask your servicing office for the appropriate registration for your state.) ESTATE Registration in the name of JOHN SMITH AND 12-3456789 EIN REPRESENTATIVE the executor, administrator, JOSEPH JONES legal guardian, conservator, EXECUTORS OF THE or similar representative of WILL (or an estate. The name of the ADMINISTRATORS estate must be adequately OF THE ESTATE) identified in the OF JAMES BROWN registration. If there is DECEASED more than one representative, some names may be omitted with WILLIAM SMITH 123-45-6789 SSN language that indicates their CONSERVATOR existence. Those named in the OF THE ESTATE registration will be presumed OF PAUL T JONES to have the authority to sign transaction requests on behalf of all the representatives. Contact your local servicing office for evidence required to establish an account. TRUSTEES Registration in the name(s) of ROBERT C JONES 12-3456789 EIN the trustee(s) of a trust, TRUSTEE UNDER followed by adequate AGREEMENT WITH identification of the SARA E COE authority by which the trust DATED 9/2/76 was created. If there is more than one trustee, some names JOHN A SMITH 12-3456789 EIN may be omitted with language TRUSTEE UNDER that indicates their DECLARATION OF existence. Those named in the TRUST DATED 3/12/66 registration will be presumed to have the authority to sign transaction requests on behalf of all the trustees. Contact your local servicing office for evidence required to establish an account. INDIVIDUAL Registration in the name of an XYZ BANK TRUSTEE 12-3456789* EIN RETIREMENT individual or non-financial FOR JOHN DOE ACCOUNTS institution as custodian is IRA U/A DATED 12/12/90 not acceptable unless proof of IRS approval is provided. Financial institutions can XYZ BANK qualify as either custodians CUSTODIAN FOR or trustees. A custodian of JOHN DOE an account does not normally IRA U/A DATED 12/31/90 12-3456789* EIN have title to the account. Under Internal Revenue Code YZ BANK TRUSTEE 12-3456789* EIN and implementing regulations, FOR JOHN DOE IRA *TAX ID of the an IRA custodial account and U/A DATED 12/31/90 financial institution an IRA trustee account are FBO JANE DOE comparable. The trustee or custodian must report to IRS the interest paid to the IRA account. Public Debt will report the interest paid to the trustee or custodian of this account. PRIVATE Registration in the name of a THE STANDARD 12-3456789 EIN ORGANIZATIONS private corporation, MANUFACTURING unincorporated association, or CORPORATION partnership. The full legal name and status (corporation, COIN COLLECTORS 12-3456789 EIN unincorporated association, or OF AMERICA, A partnership) must be included CORPORATION in the registration. The (INDIANA MEMBERS FUND) registration may reference a particular account or fund BOARD OF TRUSTEES 12-3456789 EIN (other than a trust fund). OF ANYTOWN UNITARIAN CHURCH ANYTOWN, USA AN UNINCORPORATED ASSOCIATION GOVERNMENT Registration in the name of a COMMONWEALTH 12-3456789 EIN ENTITIES state, county, city, town, OF MASSACHUSETTS AND village, school district, or TRUSTEE OF JOHN OFFICERS other government entity. If a JONES CEMETERY governmental officer is TRUST FUND UNDER authorized to act as trustee CH__SEC__ or custodian, registration may ANNOTATED LAWS OF be in title (or name and MASSACHUSETTS title) of the officer. The registration must reflect the MAYOR OF FREDERICK 12-3456789 EIN capacity in which the officer MD TR OF THE SINKING is authorized to hold property. FUND FOR THE HOLDERS OF BRANDYWINE SECURITIES UNDER CHAPTER __, ANNOTATED CODE OF MARYLAND Selected Regulations Governing U.S. Treasury Securities DEPARTMENT OF THE TREASURY CIRCULAR, PUBLIC DEBT SERIES NO. 2-86, (31 CFR Part 357) REGULATIONS GOVERNING BOOK-ENTRY TREASURY BONDS, NOTES, AND BILLS DEPARTMENT OF THE TREASURY CIRCULAR, PUBLIC DEBT SERIES NO. 1-93, (31 CFR Part 356) SALE AND ISSUE OF MARKETABLE BOOK-ENTRY TREASURY BILLS, NOTES, AND BONDS DEPARTMENT OF THE TREASURY, DEPARTMENT CIRCULAR NO. 300 FOURTH REVISION, (31 CFR Part 306) GENERAL REGULATIONS GOVERNING U.S. SECURITIES You may request copies of these publications from your local Federal Reserve Bank, or the Capital Area Servicing Center.