In a home run for troubled credit markets, Goldman Sachs (GS) raised $5 billion with backing from the FDIC. It is likely that a number of other US financial firms will follow quickly,
The terms for the debt were at a remarkably reasonable yield of 3.367% and matures in 2012.
JP Morgan (JPM) and Morgan Stanley (MS) are expected to come to market with offerings are early as next month.
According to the FT, "The FDIC-backed bonds are being issued under the temporary liquidity guarantee programme, one of many federal schemes meant to revive the financial system."
Rob Kay, head of the investment-grade syndicate desk at Credit Suisse, told the paper, "Without the government guarantee, $5bn of three year money would come at a massively higher yield."
Douglas A. McIntyre