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WASHINGTON, Feb 5 (Reuters) - The U.S. Treasury Department said on Tuesday it was resuming issuance of State and Local Government Series securities, or "slugs", which was halted in December to preserve borrowing capacity as the nation neared the legal limit on its debt.
The Treasury said issuance would resume at noon (1700 GMT).
The Treasury halted issuance of the nonmarketable debt on Dec. 28 as the first in a series of extraordinary measures to avoid running out of its capacity to borrow.
Congress passed legislation on Thursday to allow the government to keep borrowing money at least through May 19, opening the door to a resumption of slugs issuance.
Slugs are special low-interest Treasury securities offered to state and local governments to temporarily invest proceeds from municipal bond sales. They have been suspended several times over the last 20 years to avoid hitting the debt ceiling.