Are trust preferred securities eligible under the senior unsecured debt component of the Temporary Liquidity Guarantee Program?
No. Bank A issues CDs through its agent, Bank B. On the books of Bank A, the CDs are issued to Bank B, “as agent for itself and others.” The beneficial owners of the CDs in the name of Bank B are held by both non-banks and banks. Are these CDs owed to an insured depository institution for purposes of fees for the debt guarantee component of the Temporary Liquidity Guarantee Program, since they’re issued to Bank B? CDs issued to a bank “as agent for itself and others,” even where the beneficial owner is a bank, do not fall within the definition of senior unsecured debt for purposes of the debt guarantee program. Only CDs owed to a bank solely in its own capacity and not as agent qualify. The inclusion of CDs owed to an insured depository institution was intended to limit the participation of CDs in the debt guarantee program to those issued in the interbank CD market.
Related Questions
- Is senior unsecured debt issued under the FDICs Temporary Liquidity Guarantee Program (TLGP) or the NCUAs Temporary Corporate Credit Union Liquidity Guarantee Program (TCCULGP) eligible to pledge for discount window or payment system risk collateral purposes?
- Does the Temporary Liquidity Guarantee Program include new senior unsecured debt issued from an existing note program under a shelf registration that still has unused availability?
- Are trust preferred securities eligible under the senior unsecured debt component of the Temporary Liquidity Guarantee Program?
