dcsimg

Treasury Announces Forthcoming Revision to the Rate-Setting Methodology Used in Establishing Interest Rates for State and Local Government Securities

FOR IMMEDIATE RELEASE

January 19, 2017

In compliance with 31 CFR § 344.1., the U.S. Department of the Treasury is announcing that it plans to update and improve the rate-setting methodology used to establish the “current Treasury borrowing rate.” The interest rate for a State and Local Government Series (SLGS) nonmarketable Treasury security (the “SLGS rate”) is established by using the current Treasury borrowing rate, less one basis point.  A compilation of SLGS rates available for a given day establishes the “SLGS rate table.”  The revision will not take effect in this calendar year. Treasury will announce the effective date of revision and post the new methodology ahead of implementation.

The SLGS program began in 1972 to assist state and local government entities in complying with IRS arbitrage regulations. The securities are not available to the general public.

The TreasuryDirect.gov website has more information about SLGS, available at http://www.treasurydirect.gov/govt/resources/faq/faq_slgs.htm.