U.S. reopens bond sales to municipalities

Reuters

WASHINGTON, Oct 17 (Reuters) - The U.S. Treasury Departmenton Thursday said it would re-open sales of securities to localand state governments that had been halted to keep the U.S.government from breaching the debt limit.

The Treasury said it is "resuming the sale of State andLocal Government Series nonmarketable Treasury securities,effective today," at 1:00 p.m. (1700 GMT). The suspension hadassisted Treasury's management of the debt subject to limituntil a bill was signed by President Barack Obama that ended the16-day partial government shutdown and raised the U.S. borrowingcap.

The securities, called "slugs," are sold to states andmunicipalities. The move to stop the sales was taken as part ofextraordinary measures by the Treasury to comply with the debtceiling as the Obama administration and Congress negotiated asolution.

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