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GE Capital gets FDIC approval for liquidity program exit plan
By Jennifer Chiou
New York, July 22 - General Electric Co. announced that, at the request of GE Capital Corp., the Federal Deposit Insurance Corp. has approved an application filed by GE Capital that positions it to exit the Temporary Liquidity Guarantee Program.
As a result, GE Capital no longer will issue government-guaranteed short-term debt and will be able to issue non-guaranteed long-term debt with maturities of 18 months to three years, according to a news release.
The FDIC also agreed to reduce GE Capital's aggregate limit under the program, consistent with the company's position that it would not need to use its maximum authorized capacity, the release noted, adding that the company will have about $14 billion of remaining long-term debt capacity under the program with these revisions.
"Today's plan to exit from TLGP affirms the strength of GE Capital's funding and liquidity position, including reduced reliance on government funding programs and our ability to access non-guaranteed debt markets," GE senior vice president and treasurer Kathryn Cassidy said in the release.
"We have issued approximately $12 billion in long-term debt outside of the program, including close to $3 billion this week in a Euro deal that saw strong demand."
"This move is a positive step in returning the broader capital markets to normal functioning and is in line with GE Capital's 2009 and 2010 debt issuance and funding cost plans. It also allows us to respond to strong investor demand for GECC longer-dated non-guaranteed commercial paper," she added in the release.
The liquidity and funding positions of GE's financial services businesses have improved significantly during the past 10 months and remain strong, the release said.
GE Capital is the funding arm of General Electric and is based in Stamford, Conn.
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