Citigroup, the largest issuer of U.S. backed debt, is issuing $5 billion of FDIC (ultimately you and me) backed debt as early as today. This FDIC debt guarantee program is due to expire on October 31, 2009 but there is talk about extending the program on an emergency basis.
FDIC (taxpayer) guaranteed debt is rated Aaa by Moody’s Investors Service and AAA by Standard & Poor’s. Nice. This is happening as Treasury Department is talking about winding down crisis programs.
Citi's decision to issue more FDIC (taxpayer) backed debt can be interpreted several ways. One as a shrewd move - since its still available might as well use it. Second, Citi is still fu*ked up.
Here is the reality despite Citi's talk of separating itself of government ownership and paying off TARP, WE will still be on the hook for a huge portion of their balance sheet - Citi's guaranteed debt.