The Dutch government is planning a second auction of U.S. mortgage-backed securities acquired during the 2009 bailout of ING Groep NV as it seeks to wind down the portfolio within a year.
Bidders must be willing to bid on at least $2.5 billion of the securities’ notional value to participate, The Hague-based Dutch State Treasury Agency said in a statement. BlackRock Inc. will run the auction.
Goldman Sachs Group Inc. and Bank of America Corp. were among five buyers of 316 mortgage securitizations with a face value of $5.1 billion at the first auction last month. A surge in U.S home prices, with a benchmark housing index climbing the most in seven years in October, prompted the Dutch government to initiate the sales, which may total as much as $11.6 billion of securities.
ING received a 10 billion-euro ($13.6 billion) capital injection in October 2008, when residential mortgage-backed securities, or RMBS, held at its U.S. units plunged in value after foreclosures soared and property prices fell. In a second round of aid in January 2009, the Netherlands assumed 80 percent of the risk on a 27.7 billion-euro portfolio of mortgage bonds, many of which are tied to riskier borrowers who didn’t document their incomes or took mortgages with growing balances.
Dutch Finance Minister Jeroen Dijsselbloem said in November that the state may see a gain of almost 800 million euros from the unwinding of the aid agreement.