GE Capital Receives Approval for TLGP Exit Plan
General Electric today announced that, at the request of GE Capital Corporation (GECC), the Federal Deposit Insurance Corporation (FDIC) has approved an application filed by GECC, which positions it to exit the Temporary Liquidity Guarantee Program (TLGP).
FAIRFIELD, Conn. - General Electric (NYSE: GE) today announced that, at the request of GE Capital Corporation (GECC), the Federal Deposit Insurance Corporation (FDIC) has approved an application filed by GECC, which positions it to exit the Temporary Liquidity Guarantee Program (TLGP).
As a result, GECC no longer will issue government-guaranteed short-term debt (commercial paper with maturities of 31 to 270 days) and will be able to issue non-guaranteed long-term debt with maturities of 18 months to three years, as well. The FDIC and GECC also agreed to reduce GECC’s aggregate limit under the program, consistent with the company’s position that it would not need to utilize its maximum authorized capacity. With these revisions, the company will have about $14 billion remaining long-term debt capacity under TLGP.
“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. 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,” said GE Senior Vice President and Treasurer Kathryn Cassidy. “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.”
In approving GECC’s application, the FDIC considered several factors, including the financial condition of GECC, its capital, management and the risk presented to the FDIC.
The liquidity and funding positions of GE’s financial services businesses have improved significantly during the past 10 months and remain strong. GECC has completed its 2009 long-term-debt funding plan and has pre-funded about 45 percent of its 2010 requirement, including $12 billion of non-guaranteed issuance. With remaining capacity under TLGP and access to non-guaranteed debt markets, GECC believes it has sufficient flexibility to pre-fund its 2010 long-term debt issuance plan before the end of 2009. Additionally, GE Capital Services has reduced six months ahead of plan its commercial paper balance from more than $100 billion in 2008 to $50 billion at the end of the second quarter of 2009 and increased its cash balance to more than $50 billion.
GE (NYSE: GE) is a diversified infrastructure, finance and media company taking on the world’s toughest challenges. From aircraft engines and power generation to financial services, medical imaging, and television programming, GE operates in more than 100 countries and employs about 300,000 people worldwide. For more information, visit the company’s Web site at www.ge.com.
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