The National Credit Union Administration plans to sell another $1.5 billion of bonds later this week, resuming its effort to raise funds to finance the corporate credit union bailout.
According to industry officials close to the matter, this week's offering of NCUA Guaranteed Notes will be backed by floating-rate residential mortgage-backed securities owned by the five failed corporate CUs: U.S. Central Federal Credit Union, WesCorp Federal Credit Union, Members United Corporate Federal Credit Union, Southwest Corporate Federal Credit Union, and Constitution Corporate Federal Credit Union.
The offering will be underwritten by Barclays Capital, which sold $17.8 billion of the corporate bonds in the final months of last year.
The bonds are created by taking the cash flows, that is the principal and interest payments on some $35 billion of toxic MBS held by the failed corporate CUs, and repackaging them into new instruments guaranteed by the federal government.
The latest offering of these securities is expected to launch Thursday or Friday.