BlackRock’s FDIC Liquidations End in Sight: Structured Weekly
- Approaching end of months-long sales to help ease supply glut
- Asset manager has only some bonds known as CMOs left to sell
BlackRock Inc. has now liquidated the vast majority of the securities from failed banks it was tasked with selling, helping to end a supply glut that’s contributed to some of the highest spreads on mortgage bonds since the 2008 financial crisis.
Weekly sales from BlackRock’s Financial Markets Advisory unit have flooded investors with additional supply at a time when banks and the Federal Reserve have scaled back purchases. Of $114 billion in mortgage bonds and other assets it’s helping the Federal Deposit Insurance Corp. liquidate, the investment management giant now has left to sell only around $6 billion to $7 billion of agency collateralized mortgage obligations, a type of mortgage bond, according to Citigroup Inc. That doesn’t include some assets it may have decided not to sell.