ALEXANDRIA, Va. (10/15/10)--The National Credit Union Administration (NCUA) on Thursday officially announced that its NCUA Guaranteed Notes (NGNs) will carry a 0% risk weight. The NGNs are comprised of $50 billion of legacy assets held by the NCUA. Those legacy assets are primarily of private label, residential mortgage-backed securities that were significantly devalued during the turmoil in the overall mortgage market. A total of $35 billion of those assets will then be reissued as NCUA Guaranteed Notes (NGN), which will then be sold on the open market. The NCUA said that additional information about the securitization process will be made available as the process moves forward. The NCUA worked with the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the Office of Thrift Supervision to gain clarification on the appropriate risk weight required under regulatory capital risk weighting regulations. The NGNs will be offered on the open market this week, under the ticker symbol NGN. The initial offering is one of a series of similar transactions that NCUA intends to conduct in order to affect the corporate resolution plan. "Since the NCUA Guaranteed Notes are backed by the federal government, similar to U.S. Treasury securities, these investments carry a zero risk weight and are permissible for credit unions," NCUA Chairman Debbie Matz said this week. For the full NCUA release, use the resource link.