More About SLGS
SLGS Daily Rate Table
Only government bodies or other entities that issue state or local government bonds may buy SLGS. They may buy SLGS only if the proceeds from those state or local government bonds are subject to yield restrictions and arbitrage rebate requirements in the Internal Revenue Code. (See the Internal Revenue Code, section 103.)
You buy SLGS through SLGSafe. For information on how to apply for and use SLGSafe, see More about SLGSafe.
The SLGS securities daily rate table lists the applicable maximum rates allowed. The rates specified in the table are one basis point below the current estimated U.S. Treasury borrowing rate for a security of comparable maturity. [344.1(5)]
If the subscription is for $10 million or less, you must submit your intention to buy through SLGSafe at least five calendar days before the issue date. If the subscription is greater than $10 million, you must submit your intention to buy through SLGSafe at least seven calendar days before the issue date. [344.5(a), 344.8(a)]
The U.S. Treasury requires advance notice of issues and redemptions to better forecast for the cash needs of the U. S. government.
When entering a subscription, you provide the tax identification number (TIN) of the "issuer" - the Government body or other entity that issues state or local government bonds described in section 103 of the Internal Revenue Code [344.1]. The SLGS securities will be issued to, and owned by, the issuer.
If the conduit borrower fails to settle a subscription, the Bureau of Fiscal Service will ask the subscriber or the issuer to provide more information, including the conduit borrower's TIN. [344.2(m)(5)] If you provide the TIN for the conduit borrower, and the conduit borrower is the party failing to settle a subscription, the six-month penalty will be imposed on the conduit borrower rather than the issuer. [344.2(h)(l)]
If your SLGS securities were purchased before 8/15/2005, yield certification does not apply. But, if the early redemption proceeds from those securities are used to purchase new SLGS securities then the yield certification applies to the new SLGS securities purchased. [344.2((e)(2)(i)(B))]
A Treasury marketable security is any security other than a State or Local Government Series (SLGS) security. Examples of Treasury marketable securities include U.S. Treasury securities (other than SLGS securities), guaranteed investment contracts, and federal agency securities.
Yes. Proceeds of bonds issued under Internal Revenue code (IRC) sections:
- 54 (Clean Renewable Energy Bonds),
- 54A (New Clean Renewable Energy Bonds, Qualified Energy Conservation Bonds, Qualified Zone Academy Bonds (issued after October 3, 2008), and Qualified School Construction Bonds),
- 54AA (Build America Bonds),
- 1397E (Qualified Zone Academy Bonds issued after December 20, 2006, and on or before October 3, 2008, with respect to an allocation arising after 2005),
- 1400N(l) (Midwestern Disaster Area Tax Credit Bonds), and 1400U-2 (Recovery Zone Economic Development Bonds),
all of which are subject to the rules imposed by section 148, including yield restriction, may be used to purchase SLGS securities.
Proceeds of such bonds may be used to acquire SLGS for any situation in which the yield on the invested bond proceeds must be restricted, to include investments of proceeds in construction funds, reserve funds, and sinking funds under section 54A(d)(4)(C).
For more information on tax-credit bonds or Build America Bonds, contact the Internal Revenue Service's Office of Associate Chief Counsel (Financial Institutions & Products) at (202) 622 - 3980.
Full payment for each subscription must be submitted by the Fedwire Funds Transfer System with credit directed to the U.S Treasury's General Account. The ABA number for Special Investments Branch (SIB) is 051036476. Full payment must be received by 4:00 p.m. Eastern time on the date of issue. [344.2(g)]
Instructions for Transmitting Payment for Subscriptions using Fedwire:
- Use your bank's ABA routing number for the "Sender ABA".
- Use your organization name for the "Sender Name".
- ABA routing number 051036476 for the "Receiver ABA".
- TREAS SIB for the "Receiver Name".
- BTR for the "Product-Code".
- 1000 for the "Type Code".
- The name of the State or Local Government entity must be placed in the "Originator's Name" field.
- The name of the bank acting as trustee/escrow agent must be placed in the "Originator's" field.
- The owner's taxpayer identification number must be placed in the "Reference to the Beneficiary" field.
- The issue date must be placed in the "Originator to Beneficiary Information" field.
You may find that the ABA number for Special Investments Branch is not in the Banker's Book of ABA numbers. This is a special ABA number set up only for SLGS securities payments. If you get an error message when trying to send money through Fedwire, you may need to edit your file criteria for payments. If you fill out the information as shown above, we will receive the money.
Changing a Subscription Before Issue
Most changes to a subscription can be made up to 3:00 pm ET on the date of issue. You may change the Issue amount, Issuer name and address, Trustee Bank information, ACH instructions, and the Schedule of Securities, if those changes follow SLGS rules and regulations.
If you subscribed on or after August 15, 2005, the Bureau of Fiscal Service must receive the early redemption request, through SLGSafe, no less than 14 days and no more than 60 days before the requested redemption date. [31 CFR 344.6(c)] If you subscribed for the security before August 15, 2005, you must request early redemption through SLGSafe no less than 10 days and not more than 60 days before the requested redemption date.
If you early redeem SLGS securities subscribed for under SLGS regulations in place before August 15, 2005, yield certification requirements do not apply to such SLGS securities provided the proceeds are not invested in new SLGS securities. When the proceeds of SLGS securities redeemed prior to maturity on or after August 15, 2005, are reinvested in new SLGS securities, then the yield certifications apply. You will be required to make the certification at the time you subscribe for the new SLGS securities.
Effect of the Public Debt Limit on State and Local Government Series Treasury Securities
Congress sets a limit (the debt limit) on the amount the federal government is allowed to borrow. All outstanding SLGS count against the federal government's debt limit. If we issued more SLGS, they would also count against the debt limit.
Therefore, when the federal government is close to the debt limit, suspending the sale of new SLGS helps keep the debt from exceeding the debt limit.
A SLGS suspension, also known as closing the SLGS window, refers to Treasury no longer accepting new subscriptions for time and demand deposit SLGS securities. In other words, SLGS subscriptions cannot be submitted via SLGSafe (or any other method). Because there is no statutory or other requirement for the Treasury Department to issue SLGS, a SLGS suspension is announced when deemed appropriate (see above). Treasury expects to reopen the SLGS window when legislation raising or suspending the debt limit is signed into law.
Treasury rolls over an outstanding Demand Deposit SLGS into a special 90-day Certificate of Indebtedness (C of I). The new C of I earns simple interest equal to the Demand Deposit daily factor in effect at the time of suspension. Subscribers may cash that C of I early, following the same requirements as for other Demand Deposit SLGS. (For information on cashing a SLGS, see: SLGSafe Overview and Signup - TreasuryDirect
We issue press releases announcing the beginning of a SLGS suspension (which we also call "closing the SLGS window") and announcing the end of a suspension (which we also call "opening the SLGS window"). You can find those press releases on www.treasurydirect.gov and www.slgs.gov.
The press release includes the time and date of the closing or opening.
The Treasury Department announced that it will suspend the sale of SLGS at 10:00 am on May 2, 2023, until further notice. Treasury is closing the SLGS window to assist in Treasury's management of the debt subject to limit.
The Treasury Department expects to reopen the SLGS window when legislation raising or suspending the debt limit is signed into law.
Depending on the time of day and the amount of notice given, it will take several hours to reopen the SLGS window.
There's no statutory or other requirement for the Treasury Department to issue SLGS securities, so it may suspend the sale of SLGS as appropriate when the debt subject to limit is near the debt limit. All subscriptions received prior to 10:00 am ET on Tuesday, May 2, 2023, will be honored.
All outstanding SLGS count against the debt limit. Closing the SLGS window does not reduce the amount of outstanding debt that counts against the debt limit, but closing the window does stop the further increases in the debt that would be counted against the debt limit if Treasury continued to issue SLGS. Thus, closing the SLGS window does not provide new headroom under the debt limit, but it conserves the remaining headroom available.
A request to buy is called a "subscription" in SLGSafe. In the past, we have honored all SLGS subscriptions submitted by the time and date of the SLGS suspension. We are not required to do that, so we cannot promise that we will always be able to.
No. We process interest payments, maturities, and requests for cashing in SLGS early during a SLGS suspension just as we do when there is no SLGS suspension. The same regulations apply to these actions during a SLGS suspension as at other times. For more on restrictions on SLGS actions, such as asking to cash a SLGS early, see SLGSafe Overview and Signup — TreasuryDirect.
State and local governments issuing new municipal debt during a SLGS suspension may be able to invest the proceeds in other assets to stay in compliance with federal tax law.
Since 1995, the SLGS window has been closed sixteen times:
- October 18, 1995 – March 28, 1996
- May 15, 2002 – July 7, 2002
- February 19, 2003 – May 26, 2003
- October 14, 2004 – November 21, 2004
- February 16, 2006 – March 16, 2006
- September 27, 2007 – September 28, 2007
- May 6, 2011 – August 1, 2011
- December 28, 2012 – February 4, 2013
- May 17, 2013 – October 16, 2013
- February 7, 2014 – February 14, 2014
- March 13, 2015 – November 02, 2015
- March 15, 2017 – September 11, 2017
- December 8, 2017 – February 12, 2018
- March 1, 2019 – August 5, 2019
- July 30, 2021 – December 16, 2021
- May 2, 2023 –