Treasury mortgage-backed securities portfolio drops under $100 billion
The amount of principal outstanding of mortgage-backed securities in the Treasury portfolio is now $94.5 billion as the department continues to wind down its holdings of the structured finance product. Treasury made an original investment of more than $225 billion in agency-guaranteed MBS. The Treasury so far recovered $146.9 billion on MBS it purchased in 2008 and 2009 in order to keep liquidity in the agency bond market space. Today's report shows the Treasury has recovered 65% of that investment so far. "During the month of June 2011, taxpayers received an additional $12.7 billion in proceeds from this investment through sales by Treasury with a market value of $10.6 billion ($10 billion principal value) and principal and interest payments of $2.1 billion," reports the Treasury. "Through the end of June 2011, taxpayers have received a cumulative total of $146.9 billion in proceeds from this investment through sales by Treasury ($35 billion) and principal and interest payments ($111.9 billion)," the report adds. During the month of June, the Treasury focused on off-loading Fannie Mae and Freddie Mac bonds backed by 30-year, fixed-rate mortgages. The coupon stack dealt primarily with 4.5s and 5s. There was little activity in 15-year, mortgage-backed securities. The Treasury claims it received more than $19 billion in interest on the MBS purchases. Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.