If an institution has qualifying debt with an ultimate maturity date beyond June 30, 2009 should the portion of the debt that “matured” by June 30, 2009, be included in calculating the 125% cap?
The Final Rule provides that the “cap” is 125 percent of the par value of the participating entity’s senior unsecured debt including short-term (30 day or less maturity) senior unsecured debt, outstanding as of September 30, 2008 that was scheduled to mature on or before June 30, 2009. The June 30, 2009 maturity refers to the ultimate and final maturity date by which the debt must be paid in full. Only qualifying debt that must be paid in full on or before June 30, 2009, can be included in calculating the cap. Thus, no portion of such debt maturing after the June 30, 2009 deadline may be included in calculating the cap. Will federal funds purchased that were outstanding on September 30, 2008 be included in the calculation of an institution’s debt guarantee limit regardless of maturity and whether or not the federal funds purchased outstanding were evidenced by a written agreement? Yes. The debt guarantee limit is 125 percent of the participating entity’s senior unsecured debt inclusive
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