Securities Sales

The FDIC sells a range of securities including, but not limited to, stocks, bonds, asset-backed securities, mortgage-backed securities, limited partnership interests, and other securities retained from failed banks. 

Competitive sealed-bid auctions are the primary method used by the FDIC to sell retained securities. Securities with similar characteristics are commonly grouped for sale with the timeline for the auction process varying depending on the complexity of the security. 

At its discretion, the FDIC may also use other disposition strategies such as negotiated sales or participation in issuer repurchases. When large portfolios of securities are retained from a bank failure, the FDIC may also contribute securities to FDIC-sponsored structured transactions (i.e. re-securitizations).

Sales Process

• Potential Bidders are identified and bid qualification documents are distributed for execution to participate in the sale (see the “Qualification Process” section below for more information).
• Depending on the type of security being sold, Qualified Bidders are given access to a data room to review due diligence materials and/or are sent a Bid Sheet that describes the terms of the sale.
• Bids are reviewed and awarded to the winning Bidder generally within one business day of the auction; the winning bid is typically confirmed via email.
• The FDIC and its securities custodian will coordinate settlement of the auction with the winning Bidder; the timing of sale settlement depends on the type of security.

Qualification Process

As part of the qualification process, a Prospective Bidder is typically required to execute non-negotiable documents, including: 

1. Confidentiality Agreement - A Confidentiality Agreement is an agreement executed by a Prospective Bidder as a prerequisite to accessing evaluation materials as part of a FDIC securities sale.
2. Office of Foreign Assets Control (OFAC) Certification - An OFAC Certification is executed by a Prospective Bidder to verify that they are not on the Specially Designated Nationals (SDN) List.
3. Purchaser Eligibility Certificate (PEC) - A Purchaser Eligibility Certification is a form executed by a Prospective Bidder representing their eligibility to purchase assets of failed financial institutions from the FDIC.
4. Qualification Request From - A Qualification Request Form is executed by a Prospective Bidder representing their status to purchase securities from the FDIC in a transaction that qualifies as a private placement under the federal securities laws. 

Contact Us

Prospective Bidders may sign up to be included on a list to receive future sale announcements which match their expressed interests. To do so, Prospective Bidders may provide contact and investor status information as well as identify the types of securities they are interested in purchasing by completing the Prospective Bidder Information form and submitting it electronically to: ProspectivePurchaser@fdic.gov. 

For inquiries about specific sales, Prospective Bidders can also reach out to the securities sales team directly at DRRCapitalMarketsDC@FDIC.gov.

The FDIC welcomes and strongly encourages minority and women-owned businesses, which qualify as accredited investors, to participate in the FDIC's securities sales.

 

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Frequently Asked Questions

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Questions and Answers
How are securities sales advertised? Generally, securities sales are not advertised and individual securities owned by the FDIC as receiver are not publicly listed. Prospective Bidders may be notified by FDIC or a financial advisor via e-mail of an upcoming auction and can review securities offered for sale after completing the bidder qualification process.
Is a security deposit required to bid? Typically, the FDIC does not require a security deposit from qualified bidders in order to bid in a securities sale. However, the FDIC, in its full discretion, can require a security deposit for any sale.  For some securities sales, the FDIC may require that an Earnest Money Deposit (generally in an amount not to exceed 10% of the winning bid amount) be paid by the winning Bidder, which will be applied toward the purchase price.
What types of securities does the FDIC sell?   The FDIC may sell any type of security retained from a failure, including, but not limited to: United States Treasury securities Federal agency securities  Residential or commercial mortgage-backed securities Other asset-backed securities Public and private equity Corporate, municipal, and sovereign debt Structured finance instruments Limited partnership interests, including those typically associated with Community Reinvestment Act investments Tax credit investments Bankers’ Bank stock
May Prospective Bidders review the underlying securities documents? The FDIC encourages Prospective Bidders to complete document reviews and to perform their own due diligence of the securities offered for sale. To conduct an online review of the securities documents, Prospective Bidders must complete all qualification materials prior to receiving permission to access the data room. Once qualified, Prospective Bidders will have read-only access to the documents within the data room for the duration of the sale. Final documentation will be made available for download to the winning Bidder within a reasonable time after sale settlement.
Who can participate in a FDIC securities auction? Prospective Bidders must complete the qualification process prior to being eligible to participate in a FDIC securities auction. Generally, Prospective Bidders must qualify as an accredited investor (or qualified institutional buyer or qualified purchaser, as such terms are defined under the federal securities laws, depending on the transfer restrictions for the particular security being offered for sale).
Where can I find the terms and conditions of the sale? The terms and conditions of a securities sale are disclosed in the transaction agreement or Bid Sheet materials associated with each sale. The FDIC makes no representations or warranties in connection with any of the securities offered for sale.
How are securities sales settled? Settlement will occur on the settlement date listed in either the Bid Sheet or transaction agreement, which will vary depending on the security type. FDIC uses a delivery versus payment (DVP) settlement method, which requires payment to be made before the delivery of the securities to the winning Bidder.