Offering of United States Savings Bonds, Series EE, 17288-17289 [05-6660]

Download as PDF 17288 Federal Register / Vol. 70, No. 64 / Tuesday, April 5, 2005 / Rules and Regulations DEPARTMENT OF THE TREASURY Fiscal Service 31 CFR Part 351 Offering of United States Savings Bonds, Series EE Bureau of the Public Debt, Fiscal Service, Treasury. ACTION: Final rule. AGENCY: This final rule changes the interest rate determination for United States Savings Bonds of Series EE issued May 1, 2005, or thereafter. DATES: Effective: May 1, 2005. ADDRESSES: You can download this final rule at the following Internet addresses: http://www.publicdebt.treas.gov or http://www.gpoaccess.gov/ecfr. FOR FURTHER INFORMATION CONTACT: Elisha Whipkey, Director, Division of Program Administration, Office of Securities Operations, Bureau of the Public Debt, at (304) 480–6319 or elisha.whipkey@bpd.treas.gov. Susan Klimas, Attorney-Adviser, Dean Adams, Assistant Chief Counsel, Edward Gronseth, Deputy Chief Counsel, Office of the Chief Counsel, Bureau of the Public Debt, at (304) 480– 8692 or susan.klimas@bpd.treas.gov. SUPPLEMENTARY INFORMATION: This final rule changes the interest rate determination for United States Savings Bonds of Series EE. Effective May 1, 2005, the interest rate for a Series EE bond issued on or after that date will be a fixed rate of interest determined by the Secretary of the Treasury or the Secretary’s designee. The fixed rate will be announced each May 1 and November 1. The most recently announced fixed rate will apply to Series EE savings bonds purchased during the six months following the announcement (or for any other period of time announced by the Secretary). The fixed rate will be established for the life of the bond, including the extended maturity period, unless the Secretary announces a different fixed rate or we amend the terms and conditions prior to the beginning of the extended maturity period. All other Series EE terms and conditions remain unchanged. These changes do not affect bonds that were purchased before May 1, 2005. The fixed rate replaces the current variable rate for Series EE bonds. Currently, a new variable rate is announced each May 1 and November 1, and applies to bonds during the first semiannual rate period beginning on or after the effective date of the rate. Consequently, a Series EE savings bond purchased prior to May 1, 2005, SUMMARY: VerDate jul<14>2003 14:48 Apr 04, 2005 Jkt 205001 earned a new rate of interest every six months. A Series EE savings bond purchased on or after May 1, 2005, will have one rate of interest that continues for the life of the bond (although a different rate or method of determining the rate may be used for any extended maturity period). Treasury periodically re-assesses each United States savings bond program and re-examines their pricing models. After the most recent re-examination, Treasury concluded that a change to the Series EE savings bond pricing model is necessary to reflect the unique characteristics of Series EE savings bonds, as well as to harmonize the price with the pricing models used for other series of savings bonds. The change will benefit investors by the establishment of a predetermined rate that will provide greater certainty as to the amount of interest that the bond will earn. Procedural Requirements 3. Revise the undesignated center heading located prior to § 351.29 to read as follows: I Series EE Savings Bonds With Issue Dates of May 1, 1997, Through April 1, 2005 4. Revise the section heading for § 351.29, and the heading for § 351.29(a)(2), to read as follows: I § 351.29 What are the maturity periods of bonds with issue dates of May 1, 1997, through April 1, 2005? (a) * * * (2) Bonds with issue dates of June 1, 2003, through April 1, 2005. * * * * * * * * I 5. Revise the heading for § 351.30 to read as follows: § 351.30 What are interest rates and monthly accruals for Series EE bonds with issue dates of May 1, 1997, through April 1, 2005, during the original maturity period? This final rule does not meet the criteria for a ‘‘significant regulatory action’’ as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. Because this final rule relates to matters of public contract and procedures for United States securities, notice and public procedure and delayed effective date requirements are inapplicable, pursuant to 5 U.S.C. 553(a)(2). As no notice of proposed rulemaking is required, the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) does not apply. We ask for no new collections of information in this final rule. Therefore, the Paperwork Reduction Act (44 U.S.C. 3507) does not apply. * List of Subjects in 31 CFR Part 351 * Bonds, Federal Reserve System, Government securities. * * * * 6. Revise the heading and the first sentence of § 351.31 to read as follows: I § 351.31 What is the interest penalty for Series EE bonds with issue dates of May 1, 1997, through April 1, 2005, that are redeemed less than 5 years after the issue date? If you redeem a Series EE savings bond with an issue date of May 1, 1997, through April 1, 2005, less than five years following the issue date, we reduce the overall earning period from the issue date by three months. * * * * * I 7. Revise the heading of § 351.32 to read as follows: § 351.32 How are redemption values calculated for Series EE bonds with issue dates of May 1, 1997, through April 1, 2005? * * * * I 8. Revise the heading of § 351.33 to read as follows: I Accordingly, for the reasons set out in the preamble, 31 CFR chapter II, subchapter B, is amended as follows: § 351.33 What are interest rates and redemption values for Series EE bonds issued May 1, 1997, through April 1, 2005, during an extended maturity period? PART 351—OFFERING OF UNITED STATES SAVINGS BONDS, SERIES EE * 1. The authority citation for part 351 continues to read as follows: I Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 3105. 2. Revise the third sentence of § 351.0 to read as follows: I § 351.0 What does this part cover? * * * The current offer was effective May 1, 2005, and will continue until terminated by the Secretary. PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 * * * * 9. Add an undesignated center heading prior to § 351.34, to read as follows: I Series EE Savings Bonds With Issue Dates of May 1, 2005, or Thereafter I 10. Add § 351.34 to read as follows: § 351.34 What are the maturity periods of Series EE bonds with issue dates of May 1, 2005, or thereafter? (a) Original maturity. Bonds reach original maturity at 20 years after the issue date. E:\FR\FM\05APR2.SGM 05APR2 Federal Register / Vol. 70, No. 64 / Tuesday, April 5, 2005 / Rules and Regulations (b) Final maturity. Bonds reach final maturity at 30 years after the issue date. Bonds cease to earn interest at final maturity. I 11. Add § 351.35 to read as follows: § 351.35 What do I need to know about interest rates, penalties, and redemption values for Series EE bonds with issue dates of May 1, 2005, or thereafter? (a) Fixed rate or fixed rate of interest. Fixed rate or fixed rate of interest means the rate of interest for a Series EE savings bond with an issue date of May 1, 2005, or thereafter, established by the Secretary or the Secretary’s designee. (b) Determination of fixed rate of interest. (1) The Secretary or the Secretary’s designee determines the fixed rate of interest, which is established for the life of the bond, including the extended maturity period, unless, prior to the beginning of such maturity period, the Secretary either announces a different fixed rate applicable to the extended maturity period, or we expressly amend the terms and conditions applicable to the extended maturity period. (2) The Secretary’s determination of rates of interest and savings bond VerDate jul<14>2003 14:48 Apr 04, 2005 Jkt 205001 redemption values is final and conclusive. (c) Announcement of fixed rate. (1) The Secretary or the Secretary’s designee will furnish a fixed rate of interest in announcements published each May 1 and November 1. The effective date of the rates will be the first day of the month of the announcement. (2) If the regularly scheduled date for the announcement is a day when the Treasury is not open for business, then the Secretary will make the announcement on the next business day; however, the effective date of the rates remains the first day of the month of the announcement. (3) The Secretary may announce rates at any other time. (4) The most recently announced fixed rate applies only to bonds purchased during the six months following the announcement, or for any other period of time announced by the Secretary. (d) Monthly accruals. Interest accrues on the first day of each month; that is, we add the interest earned on a bond during any given month to its value at the beginning of the following month. PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 17289 The accrued interest compounds semiannually. (e) Interest penalty for Series EE bonds redeemed less than 5 years after issue date. If you redeem a bond with an issue date of May 1, 2005, or thereafter, less than five years following the issue date, we reduce the overall earning period from the issue date by three months. However, the redemption value of a bond subject to the 3-month interest penalty shall not be reduced below the issue price. This penalty does not apply to bonds redeemed 5 years or more after the issue date. (f) Redemption value of Series EE bonds at original maturity. (1) Definitive bond. At original maturity, the redemption value of a definitive bond shall not be less than the face amount/denomination of the bond. (2) Book-entry bond. At original maturity, the redemption value of a book-entry bond shall not be less than double the purchase price of the bond. Dated: March 29, 2005. Donald V. Hammond, Fiscal Assistant Secretary. [FR Doc. 05–6660 Filed 4–4–05; 8:45 am] BILLING CODE 4810–39–P E:\FR\FM\05APR2.SGM 05APR2

Agencies

[Federal Register Volume 70, Number 64 (Tuesday, April 5, 2005)]
[Rules and Regulations]
[Pages 17288-17289]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-6660]



[[Page 17287]]

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Part II





Department of the Treasury





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Fiscal Service



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31 CFR Part 351



Offering of United States Savings Bonds, Series EE; Final Rule

Federal Register / Vol. 70, No. 64 / Tuesday, April 5, 2005 / Rules 
and Regulations

[[Page 17288]]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 351


Offering of United States Savings Bonds, Series EE

AGENCY: Bureau of the Public Debt, Fiscal Service, Treasury.

ACTION: Final rule.

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SUMMARY: This final rule changes the interest rate determination for 
United States Savings Bonds of Series EE issued May 1, 2005, or 
thereafter.

DATES: Effective: May 1, 2005.

ADDRESSES: You can download this final rule at the following Internet 
addresses: http://www.publicdebt.treas.gov or http://www.gpoaccess.gov/
ecfr.

FOR FURTHER INFORMATION CONTACT: Elisha Whipkey, Director, Division of 
Program Administration, Office of Securities Operations, Bureau of the 
Public Debt, at (304) 480-6319 or elisha.whipkey@bpd.treas.gov.
    Susan Klimas, Attorney-Adviser, Dean Adams, Assistant Chief 
Counsel, Edward Gronseth, Deputy Chief Counsel, Office of the Chief 
Counsel, Bureau of the Public Debt, at (304) 480-8692 or 
susan.klimas@bpd.treas.gov.

SUPPLEMENTARY INFORMATION: This final rule changes the interest rate 
determination for United States Savings Bonds of Series EE. Effective 
May 1, 2005, the interest rate for a Series EE bond issued on or after 
that date will be a fixed rate of interest determined by the Secretary 
of the Treasury or the Secretary's designee. The fixed rate will be 
announced each May 1 and November 1. The most recently announced fixed 
rate will apply to Series EE savings bonds purchased during the six 
months following the announcement (or for any other period of time 
announced by the Secretary). The fixed rate will be established for the 
life of the bond, including the extended maturity period, unless the 
Secretary announces a different fixed rate or we amend the terms and 
conditions prior to the beginning of the extended maturity period. All 
other Series EE terms and conditions remain unchanged. These changes do 
not affect bonds that were purchased before May 1, 2005.
    The fixed rate replaces the current variable rate for Series EE 
bonds. Currently, a new variable rate is announced each May 1 and 
November 1, and applies to bonds during the first semiannual rate 
period beginning on or after the effective date of the rate.
    Consequently, a Series EE savings bond purchased prior to May 1, 
2005, earned a new rate of interest every six months. A Series EE 
savings bond purchased on or after May 1, 2005, will have one rate of 
interest that continues for the life of the bond (although a different 
rate or method of determining the rate may be used for any extended 
maturity period).
    Treasury periodically re-assesses each United States savings bond 
program and re-examines their pricing models. After the most recent re-
examination, Treasury concluded that a change to the Series EE savings 
bond pricing model is necessary to reflect the unique characteristics 
of Series EE savings bonds, as well as to harmonize the price with the 
pricing models used for other series of savings bonds. The change will 
benefit investors by the establishment of a predetermined rate that 
will provide greater certainty as to the amount of interest that the 
bond will earn.

Procedural Requirements

    This final rule does not meet the criteria for a ``significant 
regulatory action'' as defined in Executive Order 12866. Therefore, a 
regulatory assessment is not required.
    Because this final rule relates to matters of public contract and 
procedures for United States securities, notice and public procedure 
and delayed effective date requirements are inapplicable, pursuant to 5 
U.S.C. 553(a)(2).
    As no notice of proposed rulemaking is required, the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) does not apply.
    We ask for no new collections of information in this final rule. 
Therefore, the Paperwork Reduction Act (44 U.S.C. 3507) does not apply.

List of Subjects in 31 CFR Part 351

    Bonds, Federal Reserve System, Government securities.

0
Accordingly, for the reasons set out in the preamble, 31 CFR chapter 
II, subchapter B, is amended as follows:

PART 351--OFFERING OF UNITED STATES SAVINGS BONDS, SERIES EE

0
1. The authority citation for part 351 continues to read as follows:

    Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 3105.

0
2. Revise the third sentence of Sec.  351.0 to read as follows:


Sec.  351.0  What does this part cover?

    * * * The current offer was effective May 1, 2005, and will 
continue until terminated by the Secretary.

0
3. Revise the undesignated center heading located prior to Sec.  351.29 
to read as follows:

Series EE Savings Bonds With Issue Dates of May 1, 1997, Through April 
1, 2005

0
4. Revise the section heading for Sec.  351.29, and the heading for 
Sec.  351.29(a)(2), to read as follows:


Sec.  351.29  What are the maturity periods of bonds with issue dates 
of May 1, 1997, through April 1, 2005?

    (a) * * *
    (2) Bonds with issue dates of June 1, 2003, through April 1, 2005. 
* * *
* * * * *

0
5. Revise the heading for Sec.  351.30 to read as follows:


Sec.  351.30  What are interest rates and monthly accruals for Series 
EE bonds with issue dates of May 1, 1997, through April 1, 2005, during 
the original maturity period?

* * * * *

0
6. Revise the heading and the first sentence of Sec.  351.31 to read as 
follows:


Sec.  351.31  What is the interest penalty for Series EE bonds with 
issue dates of May 1, 1997, through April 1, 2005, that are redeemed 
less than 5 years after the issue date?

    If you redeem a Series EE savings bond with an issue date of May 1, 
1997, through April 1, 2005, less than five years following the issue 
date, we reduce the overall earning period from the issue date by three 
months.
* * * * *

0
7. Revise the heading of Sec.  351.32 to read as follows:


Sec.  351.32  How are redemption values calculated for Series EE bonds 
with issue dates of May 1, 1997, through April 1, 2005?

* * * * *

0
8. Revise the heading of Sec.  351.33 to read as follows:


Sec.  351.33  What are interest rates and redemption values for Series 
EE bonds issued May 1, 1997, through April 1, 2005, during an extended 
maturity period?

* * * * *

0
9. Add an undesignated center heading prior to Sec.  351.34, to read as 
follows:

Series EE Savings Bonds With Issue Dates of May 1, 2005, or Thereafter

0
10. Add Sec.  351.34 to read as follows:


Sec.  351.34  What are the maturity periods of Series EE bonds with 
issue dates of May 1, 2005, or thereafter?

    (a) Original maturity. Bonds reach original maturity at 20 years 
after the issue date.

[[Page 17289]]

    (b) Final maturity. Bonds reach final maturity at 30 years after 
the issue date. Bonds cease to earn interest at final maturity.

0
11. Add Sec.  351.35 to read as follows:


Sec.  351.35  What do I need to know about interest rates, penalties, 
and redemption values for Series EE bonds with issue dates of May 1, 
2005, or thereafter?

    (a) Fixed rate or fixed rate of interest. Fixed rate or fixed rate 
of interest means the rate of interest for a Series EE savings bond 
with an issue date of May 1, 2005, or thereafter, established by the 
Secretary or the Secretary's designee.
    (b) Determination of fixed rate of interest. (1) The Secretary or 
the Secretary's designee determines the fixed rate of interest, which 
is established for the life of the bond, including the extended 
maturity period, unless, prior to the beginning of such maturity 
period, the Secretary either announces a different fixed rate 
applicable to the extended maturity period, or we expressly amend the 
terms and conditions applicable to the extended maturity period.
    (2) The Secretary's determination of rates of interest and savings 
bond redemption values is final and conclusive.
    (c) Announcement of fixed rate. (1) The Secretary or the 
Secretary's designee will furnish a fixed rate of interest in 
announcements published each May 1 and November 1. The effective date 
of the rates will be the first day of the month of the announcement.
    (2) If the regularly scheduled date for the announcement is a day 
when the Treasury is not open for business, then the Secretary will 
make the announcement on the next business day; however, the effective 
date of the rates remains the first day of the month of the 
announcement.
    (3) The Secretary may announce rates at any other time.
    (4) The most recently announced fixed rate applies only to bonds 
purchased during the six months following the announcement, or for any 
other period of time announced by the Secretary.
    (d) Monthly accruals. Interest accrues on the first day of each 
month; that is, we add the interest earned on a bond during any given 
month to its value at the beginning of the following month. The accrued 
interest compounds semiannually.
    (e) Interest penalty for Series EE bonds redeemed less than 5 years 
after issue date. If you redeem a bond with an issue date of May 1, 
2005, or thereafter, less than five years following the issue date, we 
reduce the overall earning period from the issue date by three months. 
However, the redemption value of a bond subject to the 3-month interest 
penalty shall not be reduced below the issue price. This penalty does 
not apply to bonds redeemed 5 years or more after the issue date.
    (f) Redemption value of Series EE bonds at original maturity.
    (1) Definitive bond. At original maturity, the redemption value of 
a definitive bond shall not be less than the face amount/denomination 
of the bond.
    (2) Book-entry bond. At original maturity, the redemption value of 
a book-entry bond shall not be less than double the purchase price of 
the bond.

    Dated: March 29, 2005.
Donald V. Hammond,
Fiscal Assistant Secretary.
[FR Doc. 05-6660 Filed 4-4-05; 8:45 am]
BILLING CODE 4810-39-P