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Investments

Final ING mortgage bond auction set for next week

Dutch Treasury "saved the best for last"

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The Dutch State Treasury Agency, charged with liquidating the foreign assets of ING Group (ING), announced the final auction for the remaining $2.1 billion in private mortgage bonds.

This will bring the long history of ING private mortgage bond investments in the United States officially to a close.

A report from bond analytics firm Interactive Data said that, judging by the quality of the collateral, the DSTA "saved the best for last."

The sale comes on the heels of two previous auctions that dealt away the lion's share of the portfolio.

This time, a total of 234 securities will be out for bid, comprised mainly of senior securities.

"Prime collateral backs the bulk (83%) of the bonds, with Alt-A (7%) and POA (9%) making up the majority of the remainder. The quality of this final iteration is quite high, with the average price of the Feb 4BWIC currently at $94 based on Interactive Data evaluations," said Interactive Data in an email. "The distribution of prices is also skewed closer to par, in comparison with the previous two [ING bond] sales which contained a fair amount of securities with lower evaluated prices."

The sale is scheduled for Februray 4 and will involve eight broker dealers. Blackrock Solutions will again coordinate bids.

ING is a Dutch investment firm and insurer. It received a bailout from the Netherlands and is liquidating all non-core, non-insurance assets as part of the conservatorship.

Last month, the DTSA successfully sold around $5.1 billion of the ING US $11.6 billion RMBS portfolio.

Another $6.5 billion, comprised mainly of adjustable-rate Alt-A, fixed rate Alt-A and prime-adjustable rate mortgages, remained.

Earlier this month $4.27 billion of that was auctioned to six broker-dealers, Bank of America Merrill Lynch (BAC), Barclays (B), Citigroup (C), Credit Suisse (CS), Goldman Sachs (GS) and Morgan Stanley (MS).

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