Almost three weeks after the U.S. government put its guarantee behind new bank bonds, no U.S. finance company has braved the market, Bloomberg reported.

Though Citigroup Inc., JPMorgan Chase & Co. and Bank of America Corp. were the three largest U.S. banks issuing debt last year, they haven’t sold dollar-denominated corporate bonds since August. Barclays Capital analysts estimated on Oct. 20 that banks would use the guarantee to sell as much as $600 billion of debt securities within six months.

The delay is frustrating investors who expected government backing would spur banks to sell bonds, said Gregory Habeeb, a money manager at Calvert Asset Management Co. in Bethesda, Md. At the same time, yields over benchmark rates on investment-grade and high-yield debt are near record highs and the U.S. corporate bond market has remained all but shut.

“Rome is burning,” said Habeeb, who helps oversee $8.5 billion in assets. “So are we going to watch it burn? If we have the fire truck, then wheel out the fire truck and start spraying the water.”

Banks are hamstrung because they’re waiting for the “fine print,” said Ira Jersey, an interest-rate strategist at Credit Suisse Group AG in New York. Because they don’t know whether the debt will be guaranteed under all circumstances, bonds are difficult to price, he said. By contrast, Barclays plc and Bank of Scotland plc both sold debt this month under a similar program in the United Kingdom.

The Federal Deposit Insurance Corp. (FDIC) said Oct. 14 it would guarantee three-year senior unsecured bank debt issued through June 30, 2009, as part of a broader plan by the U.S. Treasury Department that included expanded deposit insurance and $250 billion of direct capital injections for U.S. banks.

Interim FDIC rules released Oct. 23 granted participating banks the option of selling debt securities without government guarantees for an extra fee. The rules are still subject to change following a 15-day comment period. The cost of capital for the banks will be “highly dependent” on the strength of the government’s guarantee, Jersey said. Bank lawyers are still haggling with the FDIC over which specific conditions would trigger insurance for creditors, he said.

“What constitutes a default?” Jersey said. “That’s the big thing.”

Banks have until Nov. 12 to decide whether to participate in the program, said Diane Ellis, deputy director for the division of insurance and research at the FDIC in Washington.