How will the senior unsecured debt guarantee be allocated?
The guarantee will be applied to the debt in chronological order according to the time that it was issued. For example, say that a bank’s cap is $125 million and it has no outstanding senior unsecured debt at the beginning of the day. Suppose further that the bank wishes to issue $200 million in senior unsecured debt during the course of the day and that the bank has not elected the option and paid the fee to issue certain non-guaranteed senior unsecured debt before reaching its cap. The first $125 million of debt that is issued will be guaranteed and should be issued with the proper disclosures that the debt is guaranteed. The other $75 million will not be covered and it should be made clear to the lender that that debt is not guaranteed. Does the limitation on sales of guaranteed debt to affiliates prevent affiliates of eligible entities from acting as underwriters of offerings of guaranteed debt of their affiliated eligible entities (and thereby technically owning it for a brief ins
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?
- 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?
- How will the senior unsecured debt guarantee be allocated?
