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’All roads lead to retranching in CRE crunch
Restructuring. Re-tranching. Re-remics. Repeat?
FDIC, the regulator in charge of insuring US bank deposits, has given banks the ability to restructure commercial real estate (CRE) loans to creditworthy borrowers,
Capital in the Hamp-er
For some reason we find the Home Affordable Modification Plan — the US government’s programme to encourage lenders and mortgage servicers to reduce interest payments for certain homeowners — and its impact on banks fascinating.
FDIC sets plan to refill coffers
The Federal Deposit Insurance Corp moved on Thursday to refill its fund protecting consumers’ deposits, finalising a plan to raise $45bn by having banks prepay three years of premiums, reports the WSJ.
FDIC saves securitisation
Well, sort of.
Remember FAS 167? The new accounting standard will eliminate qualified special-purpose entities (QSPEs) and lead to banks putting billions worth of securitised assets — mostly credit card trusts — back onto their balance sheets from 2010.
Wall St’s unlikely saviours – community banks
It’s being billed as an outrageous piece of behind the scenes lobbying by Big Finance. Moves are afoot to overlay the Financial Accounting Standards Board, which sits inside the SEC, with a new “oversight board” – a regulator’s regulator,
The riskless FDIC guarantee
Q: What’s not a government bond or cash but has a zero-per cent risk capital weighting?
A: A bond sold as part of the Federal Deposit Insurance Corp.’s Temporary Liquidity Guarantee Program.
(A big hat tip to Reuters columnist Rolfe Winkler for spotting the below).
Commercial real estate – work it out!
They are here! US commercial real estate loan workouts!
And they’ve already garnered their fair share of criticism. To start with though, here’s the basic idea from the FDIC and the Fed:
The regulators have found that prudent CRE loan workouts are often in the best interest of the financial institution and the borrower.
The mother of all bank securitisations?
It could be on its way from the Federal Deposit Insurance Corp — the body responsible for insuring US bank deposits.
Avid readers of FT Alphaville will know that FDIC, headed by Sheila Blair, took over its 100th failed bank this week.
All aboard the commercial real estate bailout train
It’s not as prominent as some other bailouts — but it is gaining steam.
To wit, here’s a bit from the Wednesday Congressional testimony of Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation,
For America’s small banks, the problems are just beginning
America’s large banks have already warned about the threat to their balance sheets posed by their commercial real estate exposure, but it may well be the smaller regional banks that are most at risk.
In an interview with the FT in 2008,
Sheila Bair has strong words for secured creditors
On Monday, FDIC chair Sheila Bair proposed forcing the secured creditors of any failed US banks to take a 20 per cent haircut on their exposure to said institution. According to a Reuters report, Bair believes having secured creditors take a hit when a financial institution fails “could help rein in excessive risk-taking and strengthen the financial system”.
Corus Bank assets sold for $550m
A group led by Barry Sternlicht’s Starwood Capital investment company has won the bidding for the assets of failed Corus Bank, with the help of a financing package crafted by the FDIC regulator. The purchase price of about $550m values the assets of the US bank – which specialised in loans to condominium projects – at about $2.5bn,
Annals of unintended consequences, FDIC and FAS 166/7 edition
In September, FT Alphaville posed the question: could the FDIC start seizing securitised assets to help offset the cost of dealing with failed banks?
At the heart of the question is uncertainty over how the soon-to-be-implemented FAS 166 and 167 will affect the treatment of securitised assets held by banks in receivership,
The FDIC’s ‘unknown and unknowable’ challenge
The latest moves by the increasingly controversial (and cash-strapped) Federal Deposit Insurance Corp, which seized three more failed US banks on Friday, reinforce a weekend suggestion in Casey’s Daily Dispatch,
Weekend catch-up
In case you missed these stories:
- Blackstone nears $3bn theme parks buy
US buyout group Blackstone is expected to buy 10 theme parks from brewing group AB InBev, in a $3bn deal that could be sealed on Monday.
FDIC, the ‘D’ stands for…
Here’s an interesting thought — what with all the recent concern over FDIC funding. Could the organisation, responsible for insuring US bank deposits, start seizing securitised assets to help offset the cost of a multitude of failed financial institutions?
From Asset-Backed Alert:
US banks could pay $45bn to FDIC
US banks will have to pay $45bn in up-front fees to the Federal Deposit Insurance Corporation under a plan presented on Tuesday to shore up the FDIC’s depleted deposit insurance fund. The agency warned it will run out of liquid funds early next year due to bank failures,
FDIC considers tapping banks
US banks will have to advance tens of billions of dollars in industry fees to the fund protecting depositors at the FDIC under a proposal to be to be put forward by regulators on Tuesday. The FDIC’s fund has been depleted this year after the failure of 95 lenders and now stands at about $10.4bn,
An unfortunate media/F*&C up
You’d think an institution called The Federal Deposit Insurance Corporation would be inherently incapable of creating emotive outbursts amongst analysts and members of the media.
But you’d be wrong.
FDIC may borrow funds from banks
America’s Federal Deposit Insurance Corp may ask healthy US banks to lend billions of dollars to restore the health of the depleted fund that safeguards bank deposits, reports the NYT. The initiative,
Citi raises $5bn in bail-out bonds
Citigroup raised $5bn in government-guaranteed bonds on Tuesday under an emergency FDIC facility due to expire in six weeks and which has been abandoned by most of its rivals as market conditions improved.
US starts to unwind bank support
The US is starting to pare back its emergency support for banks and financial markets, Treasury secretary Tim Geithner said on Thursday, announcing that the state guarantee for the $2,500bn money market mutual fund industry will expire on schedule this month.
Banks face loss of FDIC guarantee
The US Federal Deposit Insurance Corp is preparing to wind down an emergency programme launched last year, in what could become an early test of how the banking industry will fare without extraordinary government assistance,
US ‘problem’ bank list hits 15-year high
The number of US banks at risk of failure reached a 15-year-high while the fund protecting depositors hit its lowest level since 1993, according to figures that highlight the spread of the crisis in the US financial system.
The FDIC is not bust, ok?
The FDIC published its quarterly banking profile on Thursday, and it appears that while things are certainly pretty dismal (its fund is down to $10.4bn from $13.bn over in the quarter) the agency is not exactly about to go bust anytime soon.
FDIC’s capital twist
The Federal Deposit Insurance Corporation much-awaited rule changes for private equity firms
FDIC, which insures US banking deposits, voted 4-1 to require private equity buyers of banks to hold higher-than-usual levels of capital.
FDIC eases criteria for buy-out firms
The board of the US Federal Deposit Insurance Corporation on Wednesday voted 4-1 to require private equity buyers of banks to maintain a Tier One capital ratio of 10%, scaling back an initial proposal to require a capital ratio of 15% – three times the usual standard.
Bove braced for (many) more bank failures
What fun. Another 150-200 US banks are in line to fail in coming months, according to Rochdale Securities’ Dick Bove (formerly of Ladeburg Thalmann). Furthermore, according to the banking analyst’s latest note,
Spain’s BBVA leads race for Guaranty
BBVA, the Spanish bank, on Wednesday emerged as the frontrunner in the auction for Guaranty Financial, a struggling Texas bank with $14bn in assets that US regulators have been trying to sell for the past six weeks.
Deadline looms for Guaranty Financial bids
US banking regulators have asked prospective buyers of Guaranty Financial, a struggling Texas bank with $14bn in assets, to submit bids for the group by Monday, the FT said, citing people close to the matter.