FDIC to grease mortgage market with $1.8bn deal
The US Federal Deposit Insurance Corp is planning to sell $1.8bn of guaranteed asset-backed debt, according to IFR, in what may be a step toward restoring confidence in securities closely tied to the financial meltdown. The debt will be backed by residential mortgage assets of failed banks seized by the FDIC, market sources said. The two-part deal is expected to sell this week via Barclays Capital, said IFR, a Thomson Reuters service. The move has been anticipated by investors and dealers for months as the FDIC piles up loans from banks failing at an alarming rate. The plan calls up memories of the savings and loan crisis of the early 1990s when the federal government created the Resolution Trust Corp to dispose of assets.