The FDIC sold $233 million in notes backed by performing and non-performing commercial real estate loans from twenty-two financial institutions. These notes were originally issued to the FDIC by an LLC created in January 2010 to facilitate the sale of a 40% equity interest in the loans to ColFin DB Funding, formed by entities affiliated with Colony Capital, with the FDIC retaining the remaining 60% equity interest. The loans contributed to the LLC were previously held by the FDIC as receiver for twenty-two financial institutions. The notes issued by the LLC benefit from a full and unconditional FDIC Guaranty backed by the full faith and credit of the United States of America.
The transaction features three classes of non-interest bearing notes backed by a pool of performing and non-performing commercial real estate loans.
The Class A1 notes with face amount of $58.1mm were priced at 98.19% to yield approximately 1.12% per annum with maturity of January 7, 2012
The Class A2 notes with face amount of $117mm were priced at 95.73% to yield approximately 1.66% per annum with maturity of January 7, 2013
The Class A3 notes with face amount of approximately $58mm were priced at 92.32% to yield approximately 2.21% per annum with maturity of January 7, 2014
Pricing Date: May 12, 2010
Closing Date: May 18, 2010
Financial Advisor to FDIC / Restructuring Agent / Sole Bookrunner: Barclays Capital Inc.
Selling Group Member: Williams Capital Group, L.P.
Through this transaction the FDIC has sold all its holdings of notes issued by the LLC, though the FDIC still owns a 60% equity interest in the LLC
The notes do not accrue interest at a stated rate or make any payments prior to maturity, but instead make a single bullet payment of the face amount on the respective maturity date
The notes will be repaid prior to any cash flow distribution to equity holders
The notes represent 1:1 leverage at the time of the LLC creation in January 2010, and will benefit from credit enhancement provided by the cash flow structure and FDIC Guaranty
The FDIC, in its corporate capacity, has fully and unconditionally guaranteed the timely payment of principal due on the notes.
The Guaranty is backed by the full faith and credit of the United States of America.
Structured Sale of Receivership Assets from Twenty-two Financial Institutions
Information regarding the January 2010 creation of the LLC, the structured sale of receivership assets from twenty-two financial institutions for which the FDIC has been appointed receiver, and the issuance of the notes can be found at the following link to the FDIC website: http://www.fdic.gov/news/news/press/2010/pr10003.html