The $1 billion manufactured housing portfolio that caused the Federal Home Loan Banks of New York so much trouble late last year - prompting a $169 million loss - resurfaced recently in a $252 million shelf offering from Credit Suisse First Boston's Asset Backed Securities Corp. issuance vehicle. Essentially a re-REMIC, this represents CSFB's first securitization of MH collateral from its principal finance vehicle - which, sources speculate, could account for a financial windfall for CSFB.

The four-tranche offering reportedly priced Jan. 16 in a negotiated private placement, settling Jan. 23. The transaction consisted of $126.8 million of 1.5-year senior A1, $55.8 million of 4.31-year A2, $26.6 million of 6.04-year A3 and $25.2 million of 7.34-year A4 bonds, all rated as double-A. In addition, there is $17.6 million in subordinate B bonds, which were not offered. Standard & Poor's was the only agency to rate the offering.

And many speculated that this is just the start. CSFB announced last Oct. 3 that it had acquired $1 billion of Oakwood Homes MH-backed ABS from the FHLB's New York branch for what was estimated to be 82 cents on the dollar. "FHLB may have had a knee-jerk reaction to the negative headlines around MH at the time and just wanted to unload it," one rival banker said. "For CSFB, it's a good trade. They go in and tinker with the collateral and re-REMIC the bonds after the storm clears."

One source away from the situation theorized that up to $25 million was made on ABSHE 2004-OK1 alone, with more transactions in the pipeline.

At the time, the negative performance of the bonds caused the FHLB system to report a 42% decline in revenues, attributed to losses at three of the cooperative's regional branches - Atlanta, New York and Pittsburgh.

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