Nov. 12 (Bloomberg) -- General Electric Co. said the U.S. government agreed to insure as much as $139 billion in debt for lending arm GE Capital Corp., the second time in a month it has turned to a federal program designed to help companies during a global credit crunch.
Granting GE Capital, which isn't a bank, access to a new Federal Deposit Insurance Corp. program may reassure investors and help the unit compete with banks that already have government protection behind their debt, said Russell Wilkerson, a spokesman for the Fairfield, Connecticut-based company. Coverage would be for about $139 billion, or 125 percent of total senior unsecured debt outstanding as of Sept. 30 and maturing by June 30.
``Inclusion in this program will allow us to source our debt competitively with other participating financial institutions,'' Wilkerson said.
http://www.bloomberg.com/apps/news?pid= ... =worldwide
Someone correct me if I'm wrong.. but I always thought FDIC was insurance for bank depositors. Banks pay insurance premiums for this insurance.
GE has never paid a nickel into the FDIC insurance program. I think FDIC only has 50 billion in the fund.. so wala, FDIC is just gonna insure 139 billion of GE debt? Just like that?
