NCUA Hits The Street With More Corporate Bailout Bonds
WALL STREET – NCUA is expected this week to launch a new offering of bonds backed by the assets of five failed corporate credit unions, nearing the bottom of the barrel of some $50 billion of toxic assets held by the corporates that are being securitized.
This week’s offering of $965 million of NCUA Guaranteed Notes will be backed by some $3 billion of toxic mortgage backed securities once owned by the corporates. The securities are now held in separate trusts and are collateralized by 150 residential MBS.
This week’s offering will make a total of $27 billion of the notes, federally guaranteed by NCUA, sold since last October. NCUA expects to sell less than $5 billion more of the notes.
Proceeds from the offerings are used by NCUA to fund the pay-off of depositor credit unions at the five failures, U.S. Central FCU, WesCorp FCU, Members United Corporate FCU, Southwest Corporate FCU and Constitution Corporate FCU.
The notes are being sold through a consortium headed by Barclays Capital.