FDIC Closes $409m Securitization of Prime and Adjustable-Rate Mortgages
[Update 1: adds info now public by FDIC] The Federal Deposit Insurance Corp. (FDIC) successfully priced its $409m securitization this week using residential mortgages from 16 failed banks. The deal should settle by end of business today, according to various sources that spoke with HousingWire. At the time of publishing, both the FDIC and lead manager, the Royal Bank of Scotland, declined to provide details, citing the deal's 144a status. Under this rule, the RMBS is a private placement, restricted to high-worth qualified institutional investors. RBS also cited strict FDIC confidence controls. Sources provided the following details, which could not be verified for the above reasons. However, the FDIC may release details later today. The platform is named FDIC 2010-R1 and is a residential mortgage-backed security (RMBS) worth $409m of unrated senior notes. The collateral is broken up between fixed-rate and adjustable-rate mortgages. The weighted average life is 3.66, and the notes priced to par with a 2.184 coupon. The notes are backed by the FDIC. The subordinated certificates are comprised of a mezzanine and an over collateralization (OC) class representing 15 percent of the capital structure. The subordinated certificates will be retained by the failed bank receiverships, which may sell all or a portion at some point in the future. One of the sources added that the average FICO score of the borrowers is 714 and that the RMBS deal was pretty well-executed and not likely a reverse inquiry. Bank of America Merrill Lynch, Deutsche Bank and Williams Capital are among the co-managers. Write to Jacob Gaffney.