# 31 CFR Appendix A to Part 344, Early Redemption Market Charge Formulas and Examples for Subscriptions From December 28, 1976, Through October 27, 1996

(a) The amount of the market charge for bonds and notes subscribed for before October 28, 1996 can be determined by the following formula:

(b) The application of this formula can be illustrated by the following example:

(1) Assume that a $600,000 note is issued on July 1, 1985, to mature on July 1, 1995. Interest is payable at a rate of 8% on January 1 and July 1.

(2) Assume that the note is redeemed on February 1, 1989, and that the current borrowing rate for Treasury at that time for the remaining period of 6 years and 150 days is 11%.

(3) The increased annual borrowing cost is $18,000. ($600,000)x(11%-8%)

(4) The market charge is computed as follows:

(c) The amount of the market charge for certificates of indebtedness subscribed for before October 28, 1996 can be determined by the following formula:

(d) The application of this formula can be illustrated by the following example:

(1) Assume that a $50,000 certificate of indebtedness is issued on March 1, 1987, to mature on November 1, 1987. Interest is payable at a rate of 10%.

(2) Assume that the certificate of indebtedness is redeemed on July 1, 1987, and that the current borrowing cost to Treasury for the 123-day period from July 1, 1987, to November 1, 1987, is 11.8%.

(3) The increased annual borrowing cost is $900. ($50,000) × (11.8%−10%)

(4) The market charge is computed as follows:

**Title 31 published on 13-Sep-2018 03:45**

The following are **ALL** rules, proposed rules, and notices (chronologically) published in the Federal Register relating to *31 CFR Part 344* **after** this date.

GPO FDSys XML | Text type regulations.gov FR Doc. 2012-13779 RIN Department of the Treasury Circular, Public Debt Series No. 3-72 DEPARTMENT OF THE TREASURY, Fiscal Service Final rule. This final rule is effective June 7, 2012. 31 CFR Part 344 The Department of the Treasury (Treasury) is issuing this final rule to revise the regulations governing State and Local Government Series (SLGS) securities. SLGS securities are non-marketable Treasury securities that are only available for purchase by issuers of tax-exempt securities. Current financial market conditions have resulted in extraordinarily low yields in the secondary market for some marketable Treasury securities. As a result, rates applicable to non-marketable State and Local Government Series (SLGS) securities sold to issuers of tax-exempt securities could be negative. To prevent this, Treasury is instituting a floor on the daily SLGS rate, by amending the definition of “SLGS rate” and the definition of the “annualized effective Demand Deposit rate” for Demand Deposit SLGS securities. Additionally, Treasury is revising the definition of “Y” in the annualized effective Demand Deposit rate calculation formula to clarify the calculation method to be used during a year that contains a leap day.