Goldman Prices $2 Billion 10 Year Notes Without FDIC Backing

In what many expected to be a test of whether financial companies can raise capital without the implicit guarantee of the government, Goldman managed to price $2 billion of non-FDIC insured notes at 500 bps over comparable treasuries. In absolute terms, the notes priced with a 7.5% coupon to yield 7.779%. While the rate is high, the fact that it could even price is notable as all capital raises by financial institutions in recent months were backed by the full faith of the Federal Reserve's printing presses. The pricing is even more remarkable as today GS stock is down a little over 5%.

Indicatively, GS 5-year CDS last traded around 275, after hitting an all time high of 620 the day after Lehman filed Chapter 11.