State Street Sells $6.6B In MBS

State Street, headquartered in Boston, has sold approximately $11 billion of asset-backed securities, including $4.1 billion in U.S. non-agency mortgage-backed securities (MBS) and $2.5 billion in non-U.S. MBS. The company plans to incur fourth-quarter charges of about $350 million from the sale and continues to expect earnings for 2010 to slightly top those from last year.

The sale will enable State Street to ‘strategically reposition its investment portfolio,’ the company said in a press statement, adding that it anticipates ‘the discount accretion from the remaining securities will aggregate’ about $1.3 billion, down from a prior estimate of $3.6 billion, and that the sale will lower its 2011 net interest margin by five to 10 basis points ‘from the level that may have been achieved had the transaction not occurred.’

SOURCE: State Street

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