From the ABOVE LINK TO THE FED Collateral Held against Federal Reserve Notes: Federal Reserve Agents' Accounts

Less: Notes held by F.R. Banks not subject to collateralization $208,086,000

Of course, notes held by Federal Reserve banks NOT SUBJECT TO COLLATERALIZATION is the very definition of US NOTES, since US NOTES DO NOT REQUIRE COLLATERAL SINCE THEY ARE LAWFUL MONEY. Also note that treasury bills and bonds are held in a separate category on that balance sheet...so it ain't them.

So, it is obvious that the FED is holding just over 200 billion in US NOTES which would be LAWFUL MONEY available for redemption. I would guess that a careful reading of the Treasury balance sheets will reveal the other hundred million, or so US NOTES, less any which would still be in circulation (Remember, a total of $300 million was the total authorized by congress). I wouldn't be surprised if the commercial banks have the ability to pull the occasional US NOTE out of circulation.

Based on this, I have a high level of confidence that redemption takes place in US NOTES, and that the FED or Treasury would require a PHYSICAL REDEMPTION/PRESENTMENT for the exchange. Like all things legalistic, I assume there is a specific method of presentment which would need to take place to effect the conversion.

So study the FRB collateralization chart 708 and you will see what I said was exactly correct...every FRN is backed 1:1 with lawful money, which is comprised of treasury/USG securities, US NOTES and some gold type holdings.