GE was down another 8.5% today, hitting levels not seen since the mid-90s. That investment from Warren Buffett hasn’t done much to soothe investors’ nerves, obviously. Maybe support from the federal government — which is so much more sound, and exhibits such better judgment than Berkshire Hathaway — will help make people more comfortable. After the bell, the company announced it had received an FDIC guarantee on $139 billion of its debt:
On November 12, 2008, the Federal Deposit Insurance Corporation (the “FDIC”) approved the application of General Electric Capital Corporation (“GE Capital”) for designation as an eligible entity under the FDIC’s Temporary Liquidity Guarantee Program (“debt guarantee program”). Under the FDIC’s interim rules for the debt guarantee program, issued on October 23, 2008, eligible entities include affiliates of FDIC-insured depository institutions subject to application to the FDIC. GE Money Bank (a Federal Savings Bank) and GE Capital Financial, Inc. (a Utah Industrial Bank) are subsidiary-insured depository institutions of GE Capital. Under the terms of the debt guarantee program, the FDIC guarantees GE Capital’s senior unsecured debt, including commercial paper and term debt, issued from the date GE Capital becomes eligible under the program through and including June 30, 2009. We expect the program to be effective for GE Capital on or before Friday, November 14, 2008. There is a cap on the maximum amount of debt that GE Capital is permitted to have issued and outstanding at any time under the debt guarantee program, which is 125% of the par value of its senior unsecured debt outstanding as of September 30, 2008 that was scheduled to mature on or before June 30, 2009. The FDIC guarantees such debt until the earlier of the maturity date of the debt or June 30, 2012.
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