WALL STREET – NCUA is expected to hit the Street this week with another multi-billion dollar offering of its corporate bonds.
The latest offering will consist of cash flows on floating-rate residential mortgage-backed securities owned by the five failed corporates: U.S. Central FCU, WesCorp FCU, Members United Corporate FCU, Southwest Corporate FCU and Constitution Corporate, sources told Credit Union Journal. The cash flows are derived from the interest and principal payments on the actual bonds held in trust of the estates of the failed corporates.
NCUA sold almost $19 billion of the bonds, which are federally guaranteed, in the final months of 2010 and is expected to sell as much as $10 billion worth in the coming months.
The proceeds from the notes are used to finance the payout to depositors of the failed corporates, their natural person credit union members.
