Tuesday, May 25, 2010

FDIC Sells $233 million in Structured Notes

The FDIC sold $233 million in structured notes backed by commercial real estate loans. Their press release stated:

The sale was conducted through a private offering to qualified purchasers. The $233 million of notes are backed by performing and non-performing commercial real estate loans with a related aggregate unpaid balance of approximately $1.0 billion.

That's 23.3 cents on the dollar.

The sale of notes features three classes of notes with maturities of approximately 1.6 years, 2.6 years, and 3.6 years from the closing date.

What firms purchased their soon to rollover debt at a steep discount?

The note sale generated $222 million in proceeds. That's 22.2 cents on the dollar for institutions in receivership. The FDIC guaranteed debt is "backed by the full faith and credit of the United States."

Deeply discounted and fully guaranteed. The bailout continues.