Credit Union securitization plans quietly moving forward
A few days after the National Credit Union Administration released finalized information on its recent securitizations of failed credit union assets, the NCUA is planning more offerings expected in the early part of 2011. Officially, the NCUA won't confirm the plans. "We defer comment on any future deals," a spokesman told HousingWire. One reason for the secrecy is the relationship the NCUA holds with business partner Barclays Capital, which acts as sole book runner. "The union is planning a new series, it's in the offering," a source tells HousingWire. "It is isolating legacy assets, and we expect it to conclude in 2011." NCUA first revealed plans to securitize more than $50 billion in assets from failed corporate credit unions in September. This year's offerings met with strong investor demand and have raised proceeds totaling $13.1 billion to provide funding of deposits assumed by the bridge corporate credit unions. The first securitization platform totaled more than $3.8 billion and is called NCUA Guaranteed Notes Trust 2010-R1. According to the NCUA, $1.786 billion worth of notes are backed by fixed-rate securities and will pay a fixed-rate coupon of 2.65% per annum. NCUA said $1.361 billion in notes are backed by fixed-rate securities and will pay a fixed-rate coupon of 2.90% per annum. Another $613.2 million worth of notes are backed by fixed-rate securities and will pay a fixed-rate coupon of 1.60% per annum. The second transaction, also completed in November, featured two series of senior notes backed by residential mortgage-backed securities. NCUA said $2.62 billion worth of notes are backed by floating-rate securities and will pay a floating-rate coupon of one-month LIBOR plus 0.37% per annum, subject to a maximum note interest rate cap equal to 7% per annum. The trade group said $2.862 billion in notes are backed by floating-rate securities and will pay a floating-rate coupon of one-month LIBOR plus 0.47% per annum, subject to a maximum note interest rate cap equal to 7.00% per annum. Co-managers on the deals include JPMorgan (JPM) and Wells Fargo (WFC). The notes are rated triple-A due to the strong backing provided by the NCUA, which carries an implicit guarantee from the federal government. Write to Jacob Gaffney. The author holds no relevant investments.