Goldman Sachs is first to market with an FDIC-guaranteed bond. No price guidance has been given and it will probably be oversubscribed before that occurs. As with nearly every part of the government's relief efforts, the law of unintended consequences is in force. New corporate bonds for which the issuer pays for the FDIC guarantee may be considered to be more secure than GSE debt.
How can that be you say? FRE and FNM debt DOES NOT carry an explicit government guarantee. Their charters have not been changed. The guarantee is still implied, but is now stronger. FHFA chief Lockhart called the guarantee "affective". Compare that to the FDIC guarantee of corporate debt. That guarantee is explicit (of the FDIC). This could divert investment dollars from GSE bonds (which is sorely needed to restart the mortgage market) to FDIC-guaranteed corporate bonds. The government is about to find out that it can't have its cake and eat it too.
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