The National Credit Union Administration (NCUA) late this week sold another $1.5 billion of its NCUA Guaranteed Notes, bonds whose cash flows ultimately come from toxic MBS owned by now defunct corporate credit unions.
To date, the regulatory agency has sold $19 billion worth of these corporate bailout bonds, with more possibly on the way.
The floating-rate notes were priced at 45 basis points over the one-month London interbank offered rate. The offering was underwritten by Barclays Capital.
The MBS belonged to five failed corporate credit unions. Because the NCUA notes are federally guaranteed, they are considered permissible investments for rank and file credit unions.