NCUA Boosts Size Of Second Corporate Offering Amid Big Demand

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WALL STREET – NCUA has increased the second offering of its corporate bailout bonds, expected to price this morning, to $3.76 billion from a planned $2.82 billion.

This week’s sale, following the initial $3.85 billion offering two weeks ago, is comprised of cash flows from commercial mortgage-backed securities held by U.S. Central FCU and WesCorp FCU.

The initial offering of bonds, formally known as NCUA Guaranteed Notes, was oversubscribed because of the federal government guarantee through NCUA. The regulator plans to sell as much as $35 billion of the bonds.

Barclays Capital is the lead underwriter of the offering.

NCUA is selling the bonds as part of the liquidation of the corporate system. However, the underlying bonds held by the corporates will still be held by NCUA, which will continue to shoulder additional losses on the corporates’ investments.

 

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