And that’s good news for broadcasters as well. GE Capital, which is a significant media lender, has been designated as eligible for the FDIC’s debt guarantee plan announced in late October. That means that the senior unsecured debt of GE Capital is now guaranteed by the Federal Deposit Insurance Corporation, which should strengthen investor confidence in the company’s commercial paper and other debt issues – which hopefully will make it easier for GE Capital to raise funds which, in turn, it can lend to creditworthy businesses.
The FDIC on Wednesday approved the application by GE Capital for designation as an eligible entity under the FDIC’s Temporary Liquidity Guarantee Program and that is expected to become effective by today (11/14).
“Under the terms of the debt guarantee program, the FDIC guarantees GE Capital’s senior unsecured debt, including commercial paper and term debt, issued from the date GE Capital becomes eligible under the program through and including June 30, 2009,” the company explained in an SEC filing. “There is a cap on the maximum amount of debt that GE Capital is permitted to have issued and outstanding at any time under the debt guarantee program, which is 125% of the par value of its senior unsecured debt outstanding as of September 30, 2008 that was scheduled to mature on or before June 30, 2009. The FDIC guarantees such debt until the earlier of the maturity date of the debt or June 30, 2012,” the filing said.