Treasury Suspends Sales Of State And Local Government Series Securities
FOR IMMEDIATE RELEASE
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."