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NCUA extends corporate CU liquidity guarantee program
ALEXANDRIA, Va. (5/22/09)—The National Credit Union Administration’s Temporary Corporate Credit Union Liquidity Guarantee Program (TCCULGP ) will now provide greater liquidity and “low-cost stable” funding sources to eligible corporate credit unions over a longer period of time after the NCUA board Thursday voted to revise parts of the program during a closed meeting. The TCCULGP provides a National Credit Union Share Insurance Fund (NCUSIF) guarantee of principal and interest for debt issued under the program. As modified, the issuance period ending date of TCCULGP funds will be extended until June 30, 2010 and guaranteed debt will not expire until June 30, 2017. The fees paid on existing debts will also change, with debts with a maturity of up to two years being subject to an annualized assessment rate of 10 basis points. Debts with a maturity of six to seven years will be charged 35 basis points, yearly, with graduated price points for many dates in between. This fee structure should “provide sufficient income to fund any losses related to the TCULGP,” NCUA Chairman Michael Fryzel said in a statement accompanying the release. The revised terms would also restrict the amount of NCUSIF-covered debt that corporate credit unions could issue. Corporate credit unions looking to take part in the TCCULGP must execute a new TCCULGP Agreement. Eligible creditors must ensure that a given debt obligation qualifies for coverage under the newly-revised TCCULGP and must also “obtain and record” confirmation that the participating credit union “intends that particular obligation to be guaranteed by the NCUA“ to cover any debt obligation issued after June 30, 2009, the NCUA release said.


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