Barclays Capital is taking orders from investors on at least one Federal Deposit Insurance Corp. (FDIC) structured note deal with two others on the way as the government moves to monetize at least $4 billion worth of product, according to hedge fund and investment bankers familiar with the matter.
Two offerings by Barclays — both private placements — are actively being discussed in the market: a $1.33 billion floating rate deal, and a $480 million fixed-rate transaction.
"The FDIC is putting a 100% guarantee on these," one investment-banking source said. The collateral includes residential and construction loans culled from failed banks.
The buyer will pay a fraction of the assets' value, work the underlying loans, and share some of the upside with the government.
However, by selling structured notes, the agency will receive some cash upfront. At least one of the deals could close this week.
The FDIC and Barclays declined to comment.