Treasury
Suspends Sales Of State And Local Government Series Securities
September 21, 2007
The Treasury Department announced the suspension of sales of
State and Local Government series (SLGS) nonmarketable Treasury
securities until further notice, effective as of 3:00 p.m.,
Eastern Daylight Time, Thursday, September 27, 2007. This suspension
is necessary because the statutory debt ceiling has not been
raised. The suspension will facilitate Treasury's management
of the debt subject to limit.
The
suspension applies to demand deposit and time deposit securities.
Subscriptions for SLGS received by the Bureau of the Public
Debt prior to 3:00 p.m., EDT, September 27, 2007, will be issued
on the date requested. New subscriptions for SLGS will not be
accepted until the suspension is lifted.
Consistent
with our past practice, any unredeemed demand deposit securities
as of September 27, 2007, will be invested in special 90-day
certificates of indebtedness. These certificates will earn simple
interest equal to the demand deposit daily factor in effect
on September 27, 2007, and may be redeemed prior to maturity
according to the same redemption lead time requirements applicable
to demand deposit securities. If the debt ceiling is raised
and the suspension of sales lifted prior to the maturity date
of the special 90-day certificates of indebtedness, the certificates
and any accrued interest will be automatically converted back
to demand deposit securities, unless the owner advises that
it chooses to retain them until maturity or redeem them early.
This conversion process does not require any action on the part
of demand deposit security holders.
The
Internal Revenue Service has issued guidance to affected entities
in Revenue Procedure 95-47, 1995-47 I.R.B. 12, which is available
at www.irs.gov/bonds by selecting the Revenue Procedures link
under "TEB Published Guidance."
