What is the debt ceiling and how does it affect SLGS?
Congress sets a limit (the debt ceiling) on the amount the Government is allowed to borrow. When the debt ceiling starts approaching, Treasury may suspend the issuance of additional debt to delay reaching the limit. SLGS securities sales are usually one of the first to be suspended. In past debt issuance suspension periods, new Time and Demand Deposit SLGS securities sales have been suspended. However, because each period is unique, Treasury may announce special procedures for the administration of unredeemed SLGS securities. Under prior announcements, unredeemed Demand Deposit securities have been typically rolled over into special ninety-day certificates of indebtedness. Treasury has historically permitted these certificates of indebtedness to be early redeemed under certain conditions and has continued to pay interest and maturity amounts on outstanding SLGS securities. Investors may choose to early redeem their SLGS securities before the SLGS window closes.
