FDIC To Securitize Failed Banks’ Assets

The Federal Deposit Insurance Corp. (FDIC) is expected this week to price the first of three securitizations that will be backed by loans formerly owned by failed banks.

The first transaction will be a $1.8 billion offering of previously issued non-agency residential mortgage-backed securities, the Wall Street Journal reports, citing documents obtained by the Dow Jones Newswire.

Subsequent transactions are expected to include a $1.37 billion three-part transaction and a $668 million one-tranche transaction, according to Reuters.

The securitizations will carry an FDIC guarantee and government backing. Assets will include residential, commercial and construction loans pooled from failed banks, including Houston-based Franklin Bank and Chicago-based Corus Bank.

Barclays Capital has been tapped to lead the first transaction, according to the reports.

SOURCES: Wall Street Journal, Reuters


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