Treasury Suspends SLGS

David R. Kotok
Thu May 4, 2023

On May 2, The Bond Buyer, a leading municipal finance publication, reported the abrupt Treasury’s suspension of SLGS sales. Here is the opening of the article:  
The Treasury Department has suspended the sale of State and Local Government Series securities in what it characterized as a necessary move to ward off the threat of a default.
The suspension is effective for demand deposits and time deposit securities beginning May 2 until further notice, Treasury said. Those subscriptions received by the Bureau of Fiscal Service before 10:00 a.m. on May 2 will be issued on the date requested.
(“Treasury suspends sale of SLGS,”

The report included the details of a refunding in progress in Columbus, Ohio and how the city’s finance officer faced a disruption in the middle of a nearly half billion financing.
Cumberland Advisors Market Commentary - Treasury Suspends SLGS by David R. Kotok

This SLGS suspension means that every state and local government financing that needs a federally backed escrow will now incur a higher cost. Every school board, airport, hospital, college, sewer plant, etc. The debt-ceiling political charade now has impacted the entire universe of 90,000 separate municipal financial institutions ranging in size from a small fire district getting a new truck to the State of California. 

Shame on all those politicians (Democrats & Republicans) who are now imposing this direct or contingent cost on all Americans.   To paraphrase Roman history.  They fiddle (like Nero) WE BURN (Pay more).


David R. Kotok
Chairman & Chief Investment Officer
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