GE Capital, a unit of General Electric Co., has received approval from the Federal Deposit Insurance Corp. (FDIC) to exit the Temporary Liquidity Guarantee Program (TLGP), the firm said yesterday.
As a result, GE said it will no longer issue government-guaranteed commercial paper with maturities of up to 271 days, and will now be able to issue non-guaranteed, long-term debt with maturities of 18 months to three years.
GE Senior Vice President Kathryn Cassidy said the move will allow GE to raise money in the bond markets more cheaply.
Cassidy also said the company has issued $12 billion in debt not backed by the government since November.
The FDIC and GE Capital also agreed to reduce GE Capital’s aggregate limit under the program. The company will now have $14 billion remaining long-term debt capacity under the TLGP.
The FDIC will lower its available credit limit to GE under the program to $65 billion from $126 billion.
Meanwhile, CIT Group — GE Capital’s smaller competitor — is on the verge of bankruptcy, and was not granted access to the FDIC program.
GE Capital has met its financing goals for the year.
Additionally, GE Capital sold $750 million of three-year floating-rate notes under the FDIC program on Monday.
Even though it plans to exit the program, which expires Oct. 31, GE Capital will still have the capacity to issue an additional $14 billion before reaching a limit set by the FDIC.