NCUA Eyes Third-Party Recoveries As Part Of Corporate Restructuring
ALEXANDRIA, Va. – NCUA is expected as soon as today to announced civil charges against third-party entities involved in the failure of WesCorp FCU, expanding the agency’s efforts to recover some of the $7 billion of losses estimated from the failure of the one-time $34 billion corporate.
The charges are expected to revolve around the sale of the toxic mortgage-backed securities bought by WesCorp. NCUA officials declined to comment.
NCUA previously filed civil suits against directors and officers of WesCorp, seeking to recover more than $1 billion from directors and officers liability insurance the corporate giant held.
Separately, NCUA on Thursday said it completed the first offering of the year of federally guaranteed NCUA Guaranteed Notes, comprised of cash flows on the toxic WesCorp bonds and those owned by the four other corporate failures, U.S. Central FCU, Members United Corporate FCU, Southwest Corporate FCU and Constitution Corporate FCU.
The offering of $1.5 billion of floating rate notes was priced on Tuesday and closed yesterday, with a coupon of 45 basis points over LIBOR.
The offering is the sixth of corporate bonds totaling $18.3 billion. As a result, NCUA has securitized about 63% of the toxic bonds held in trusts from the five corporate failures.
The remaining NGN offerings are scheduled to be completed over the next few months.