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Latest NGN offering expected to get AAA rating
ALEXANDRIA, Va. (2/7/11)—The National Credit Union Administration’s (NCUA) latest NCUA Guaranteed Notes (NGN) offering has been tentatively assigned an AAA rating by market analyst Fitch Ratings. The high rating is due to the assets being backed by the full faith of the U.S. Government. The $1.253 billion in NGNs should be available for purchase soon. The latest NGN offering will be comprised of mortgage-backed securities. A price for the NGNs had not been released at press time, but price guidance was around 40 to 45 basis points. Fitch in a release said that the senior notes would accrue interest at a rate of one-month LIBOR plus a spread subject to a maximum rate of 8% per annum. The NCUA last month completed its first NGN sale of 2011, gaining $1.5 billion in proceeds. The agency has completed 65% of the securitization designed to fund deposits assumed by the bridge corporate credit unions, and has gained a total of $19 billion in revenue from its NGN sales. The remainder of the NGNs will be sold in the coming months, according to the NCUA.


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