The $3.847 billion securitization for the National Credit Union Administration (NCUA) has launched and is expected to price early afternoon today. This is the first in a series of securitizations for the NCUA.
The offering, which has Barclays Capital as the sole bookrunner, comprises two triple-A-rated tranches. The class I-A portion, which is expected to price at 45 basis points over the one-month Libor, has a 4.21-year weighted average life and is worth almost $3.3 billion. The class II-A tranche, which is expected to price at 100 basis points over interpolated swaps, has a 3.34-year weighted average life and is worth $566.5 million.
Wells Fargo and JPMorgan Securities are co-managers on the deal, which is expected to settle Oct. 27.
CastleOak Securities, ISI, Loop Capital Markets, and Williams Capital Group are part of the transaction's selling group.
The deal is rated by Moody's Investors Service, Standard & Poor's and Fitch Ratings.
This deal is reportedly the first of at least eight securitization deals that the NCUA is planning on. It has over $35 billion in assets, mostly MBS, that it plans to sell in the securitization market.
The underlying RMBS portfolio of assets will be split into two pools, according to a Fitch Ratings presale report. The issuer will issue securities in two series, each represented by a senior note and an owner trust certificate that will be initially retained by the NCUA, which is the deal's guarantor.
According to Fitch, series I will be backed by the floating-rate RMBS portfolio, while series II will be collateralized by the fixed-rate portfolio. There will be no cross-collateralization between the two series, the rating agency said.