Legacy Asset Investments Carry 0% Credit Risk
Legacy asset-backed NCUA Guaranteed Notes will carry a 0% risk weight. NCUA made the announcement today in accordance with clarification gained from the Federal Reserve Board, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and the Office of Thrift Supervision.
Information regarding the first round of NGN issuances, some $4 billion worth which close October 25, is making its way to broker dealers and investors this week. D. Henry Blevins, credit union group managing director for Little Rock, Ark.-based securities firm Crews & Associates, said his trading desk was told the unofficial price on $3.5 billion worth of floating rate bonds will be 40 basis points over the one-month LIBOR rate. The price for the remaining $500 million will be a fixed rate, and is not yet known.
Interested credit unions must purchase the bonds directly from U.S. Central FCU's wholly owned broker dealer CU Investment Services, Inc.