FDIC Prices $1.8bn of Structured Notes
The first Federal Deposit Insurance Corp. (FDIC) issue of structured financing, using assets seized from failed banks as collateral, priced this week. The structured notes priced within 10bps tight of guidance, according to pricing information provided to HousingWire. One class of notes worth $1.33bn priced at 55bps over Libor, 10bps tighter than guidance out earlier this week. The class of $480m of notes priced at 85bps over Libor, 5-10bps tighter than guidance. The larger of the classes has a weighted average life (WAL) of 3.11 years, while the smaller piece has a WAL of 4.71 years. The issue bears a 100% FDIC guarantee, meaning it carries the full faith and credit of the US. The issue was expected by the industry this week to be backed by private-label mortgage-backed securities (MBS), as well as other highly-seasoned cherry-picked assets, acquired through depository bank failure receiverships. Sources confirm that Barclays Capital is lead arranger on the deal though the official release of information remains restricted. As HousingWire previously reported, the collateral for this and anticipated new deals from the FDIC is a mixed-bag of residential and commercial loans, with some construction loans. The three-pronged approach used to determine the weighted-average-life - default rates, prepayments and loss severity - is an indication the assets are high-seasoned. Write to Diana Golobay.