Today, the NCUA announced in its weekly corporate update that it made "several significant modifications" to the Temporary Corporate Credit Union Liquidity Guarantee Program yesterday. The board authorized the extension of the program to apply to newly issued unsecured debt obligations issued on or before June 30, 2010, beginning June 30.
"The one-year extension provides participating corporate credit unions with greater flexibility in their liquidity planning," said Chairman Michael Fryzel.
The board also extended the maximum term for debt covered by the Program from June 30, 2012, to June 30, 2017, and revised the fee schedule from a flat rate of 75 basis points to a rate based on the maturity of the debt instrument at the date of issuance.
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"These changes will allow greater choice for corporates in meeting their liquidity needs at significantly lower cost," Fryzel said.
The NCUA also announced it will issue a Letter to Credit Unions later today that will provide guidance to natural person credit unions on the treatment for exhausted paid-in-capital and membership capital accounts at corporate credit unions. The regulator is currently preparing an additional Letter to Credit Unions that will provide guidance regarding the impact of this week's Congressional action.
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