FDIC Said to Plan First Sale of Home-Loan Bonds Since July 2011

The Federal Deposit Insurance Corp. plans to sell $221.1 million of securities backed by residential mortgages held by failed banks, according to a person familiar with the transaction.

The agency is selling guaranteed notes backed by $276.4 million of loans, said the person, who declined to be identified because the terms aren’t set. More than 70 percent of the mortgages are from Home Savings of America, and at least six other banks contributed 2.5 percent or more, the person said.

The FDIC began raising cash in 2010 through the bond market for the first time since the early 1990s, offering the agency a source of liquidity aside from assessments on healthy banks or its emergency line of credit with the U.S. Treasury.

The Washington-based agency’s sales since then have been tied to $7.4 billion of assets, with the FDIC placing $359.4 million of bonds backed by $449.3 million of commercial-mortgage debt in its last offering in May 2012, according to data compiled by Bloomberg. It last sold securities tied to residential notes in July 2011, the data show.

Jefferies Group LLC is managing the latest sale, in which the underlying mortgages are 54 months old on average and carry current loan-to-value ratios of 106 percent, the person said.

David Barr, a spokesman for the FDIC, declined to comment.

Before it's here, it's on the Bloomberg Terminal.