On Thursday the National Credit Union Administration will issue roughly $1.5 billion of 'NCUA Guaranteed Notes' backed by the cash flow of mortgage backed securities culled from failed corporate credit unions.
The sale proceeds will be used to finance the bailout of these institutions.
This week's offering, the tenth since October, makes a total of more than $25 billion of the notes sold, the proceeds of which are being used to pay off credit union depositors in the five failed corporates: U.S. Central FCU, WesCorp FCU, Members United Corporate FCU, Southwest Corporate FCU and Constitution Corporate FCU.
NCUA plans to offer another $3 billion of the notes as part of the program.
All of the notes issued to date are federally guaranteed and are backed by the cash flows of toxic MBS owned by the five corporate failures. Barclays Capital is the lead underwriter of the offering.
