US looks to offload $13 bln of mortgage bonds seized from SVB, Signature - Bloomberg News

Signature Bank

12/09/2023 23:07

Sept 12 (Reuters) - The U.S. government is looking to
offload nearly $13 billion of mortgage bonds it amassed from
Silicon Valley Bank and Signature Bank following the collapse of
the lenders, Bloomberg News reported on Tuesday, citing people
with knowledge of the transactions.
    The bonds were part of the $114 billion of assets that the
Federal Deposit Insurance Corp (FDIC) picked up when it took
over SVB and Signature earlier this year, according to the
report, which added the bonds were backed by long-term, low-rate
loans made primarily to developers building affordable
apartments. 
    The FDIC has also discussed alternatives to cutting the
prices on the bonds, including potentially repackaging the debt
into new securities, the report said. 
    The FDIC in April retained BlackRock  BLK.N  unit Financial
Market Advisory to sell the securities portfolios of the two
failed lenders. BlackRock later that month kicked off a sale
process for the assets, Bloomberg had reported. 
    BlackRock had preliminary discussions with investors about
the mortgage bonds, but they proved hard to sell, the Bloomberg
report said on Tuesday.
    The FDIC and BlackRock did not immediately respond to
Reuters requests for comment. 

 (Reporting by Deborah Sophia in Bengaluru; Editing by Shailesh
Kuber)
 ((DeborahMary.Sophia@thomsonreuters.com;))