Today, the Board of the Federal Deposit Insurance Corporation (FDIC) adopted a Notice of Proposed Rulemaking (NPR) that reaffirms the October 31, 2009 expiration of the Debt Guarantee Program (DGP) component of the Temporary Liquidity Guarantee Program (TLGP). In addition, the FDIC will seek comment on the following two alternatives as contemplated under the NPR:

  • Alternative A - the DGP would expire as provided for by the FDIC's existing regulation on October 31 2009 with FDIC guarantee for such debt expiring no later than December 31, 2012; and  
  • Alternative B - the DGP will expire as provided for on October 31 2009, however, the FDIC would establish a six-month emergency guarantee facility to guarantee senior unsecured debt issued on or before April 30, 2010. The emergency facility would be available on a limited case-by-case basis to (i) insured depository institutions participating in the DGP and (ii) other entities participating in the DGP that have issued FDIC-guaranteed debt under the DGP by September 9, 2009, all subject to application to the FDIC and approval of the Chairman, after consultation with the Board. Senior unsecured debt issued under the emergency guarantee facility would be guaranteed by the FDIC until a date no later than December 31, 2012, and would be subject to an annualized participation fee of at least 300 basis points.

Recently, on August 26, the FDIC adopted a final rule providing for the limited extension until June 30, 2010 of the Transaction Account Guarantee Program component of the TLGP.