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IPFS News Link • Central Banks/Banking

BlackRock to Kick off Sales of Failed Banks' Securities for FDIC

• Scott Carpenter and Silla Brush

BlackRock's Financial Markets Advisory unit will launch mortgage-backed security pool sales Tuesday morning and continue the process later in the week, according to emails about the sales sent to investors seen by Bloomberg.

The government hired BlackRock to sell the collapsed banks' securities earlier in April, highlighting the firm's role as an adviser to regulators in times of financial peril.

BlackRock and the FDIC declined to comment.

While the securities sales "seem like a lot out of the gate," it's likely to be an orderly process, said Skyler Weinand, founder and chief investment officer at Regan Capital, which manages fixed-income investments for institutions.

"I don't think that either BlackRock or the FDIC wants to rock the boat in terms of price stability — and everyone has skin in the game to get best execution," he added.

The world's largest asset manager expects to ramp up trading of the mortgage tools to four days a week — planning to sell $1.5 billion to $2 billion per week depending on liquidity and trading conditions, the message said.

It also plans to hold auctions of other securitized pools of assets including residential mortgage-backed securities that aren't backed by government agencies, as well as collateralized mortgage obligations, according to a separate note seen by Bloomberg.


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