Dexia will provide a $5 billion committed, unsecured standby line of credit to Financial Security Assurances (FSA) financial products segment, according to todays company release.
The financial products segment issues guaranteed investment contracts to municipal issuers and others requiring triple-A rated deposits.
Robert Cochran, CEO of FSA Holdings, Dexias subsidiary and holding company for FSA, said that despite the financial products businesses historically conservative liquidity strategy and ample liquidity to meet obligations, the company wants to remove any doubt that we will have the resources to hold investment assets to maturity, given highly nervous financial markets.
The line will have an initial term of five years and will be renewed as needed thereafter.
