The Federal Deposit Insurance Corp. has sold $10.5B of Ginnie Mae project loan securities that it held as receiver for Silicon Valley Bank, which failed more than a year ago. Such debt is backed by apartment loans.

The buyer of the Ginnie Mae project loan securities was a group of trusts tied to the Federal Financing Bank, which is part of the U.S. Treasury. Most of the other SVB assets were sold last year on the open market by BlackRock Financial Market Advisory.

The January sale, which the FDIC reported in its latest annual report, represented a large part of the last major group of assets held by the agency as a result of the SVB implosion. At the end of 2023, the FDIC still held $13B in face value in Ginnie Mae project loan securities.

“The transaction gets the securities off the FDIC books and likely eliminates the possibility that the securities might flow into the private markets,” Santander wrote in a note to clients, as reported by Bloomberg.

Considering that the $10B-plus total of notes is roughly as much in Ginnie Mae project loan securities as typically sell in a year, that volume all at once had the potential to represent a fire sale and disrupt the market, Bloomberg notes.

But the fact that the assets were quietly taken off the FDIC books without being sold on the open market forestalled that potential market disruption.

The FDIC did not respond on Tuesday morning to a query from Bisnow on the sale.

When SVB and Signature Bank went bust a year ago, the FDIC took possession of roughly $114B in assets by face value from the two banks. The assets were mainly agency mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities.

The failure of the banks and the aftermath still have a lingering impact on commercial real estate lending, with CRE loans down and credit standards tighter.