BlackRock plans bank sell off

On Tuesday, BlackRock will begin selling securities from failed banks in order to help the Federal Deposit Insurance Corp. (FDIC) sell $114 billion of assets it picked up from Silicon Valley Bank and Signature Bank. The mortgage-backed security pool sales will begin in the morning and continue throughout the week.

BlackRock’s Financial Markets Advisory unit was hired by the government earlier this month to sell the securities, showing the company’s role as a financial adviser in times of economic stress. Both BlackRock and the FDIC declined to comment on the situation.

The sale of the securities is expected to be an orderly process as BlackRock plans to ramp up trading of the mortgage tools to four days a week. The firm expects to sell $1.5 billion to $2 billion per week, depending on liquidity and trading conditions. The company also plans to hold auctions of other securitized pools of assets including residential mortgage-backed securities that aren’t backed by government agencies, as well as collateralized mortgage obligations.

Skyler Weinand, founder and chief investment officer at Regan Capital, which manages fixed-income investments for institutions, said that while the securities sales may seem like a lot out of the gate, he believes it will be an orderly process. Weinand believes that neither BlackRock nor the FDIC want to rock the boat in terms of price stability and everyone has skin in the game to get the best execution.

In summary, BlackRock will begin selling failed banks’ securities on Tuesday in order to help the FDIC offload $114 billion of assets it picked up from Silicon Valley Bank and Signature Bank. The world’s largest asset manager will ramp up trading of mortgage tools to four days a week and expects to sell $1.5 billion to $2 billion per week depending on liquidity and trading conditions. BlackRock also plans to hold auctions of other securitized pools of assets including residential mortgage-backed securities that aren’t backed by government agencies, as well as collateralized mortgage obligations.