As of September 30, 2008, neither of two insured depository institutions had outstanding senior unsecured debt. What will their debt guarantee limit be if they merge?
Two percent of the consolidated total liabilities of the two institutions as of September 30, 2008. 12 CFR 370.3(g) allows an eligible entity to elect to issue senior unsecured non-guaranteed debt with maturities beyond June 30, 2012, at any time, in any amount, and without regard to the guarantee limit, provided that a nonrefundable fee is paid. Must all eligible entities in a holding company structure make the same election pursuant to 12 CFR 370.3(g)? No. If on September 30, 2008, an insured financial institution had only fully insured interbank CDs outstanding, would it be eligible for the alternative two percent of total liabilities debt guarantee limit? Yes. The FDIC has interpreted the definition of senior unsecured debt pursuant to 12 CFR 370.2 to include only the portion of interbank CDs outstanding that are not otherwise fully insured. Accordingly, so long as the interbank CDs outstanding were fully insured, the insured depository institution’s cap would be the alternative tw
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?
- Is there a limit to how much guaranteed debt a participating entity may issue under the debt guarantee component of the Temporary Liquidity Guarantee Program guarantee?
- As of September 30, 2008, neither of two insured depository institutions had outstanding senior unsecured debt. What will their debt guarantee limit be if they merge?
