Outlook 2009: FDIC-backed deals total $100 billion for year; thousands eligible to tap bond guarantee until June

By Andrea Heisinger

New York, Dec. 31 - The start of offerings under the Federal Deposit Insurance Corp. Temporary Liquidity Guarantee Program was one of the most interesting parts of the past year, one market source said, adding that it will continue to be watched closely in the first part of 2009.

A larger variety of names is likely to jump into the program, he said, as those who took advantage of it in the past month were nearly all bank holding companies.

"Everybody's going to issue until they can't anymore," the source said.

There has already been about $100 billion issued under the program, he said, with upwards of $300 billion available. Those eligible can issue under the guarantee through June 2009.

There are thousands of names eligible to issue under the program, he said, with only a handful tapping it so far.

It was unclear how the program would work when it was announced as part of the $700 billion financial bailout package. It also became a guessing game of who would be the first to access the package.

Goldman Sachs Group Inc. became the first issuer and others such as JPMorgan Chase & Co. and Morgan Stanley quickly followed, all doing deals before Thanksgiving.

Although the deals are not generally being counted in league tables or end-of-year totals, they are still being watched closely on syndicate desks, sources said.

They are traded off agency desks, but have sales coverage all around, a source said.

Another source called the government-guaranteed supply "a wrinkle" in 2008 because it's not league-table eligible, but still part of issuance.

Without the FDIC-backed deals, the year saw about $650 billion in deals, he said.

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