OREANDA-NEWS. The number of combined defaults and deferrals for U. S. bank TruPS CDOs declined to 14.8% at the end of September 2016 from 15.5% at the end of August 2016, according to the latest index results published today by Fitch Ratings.

Approximately 0.6% of this drop is attributed to the cure of Flagstar Bancorp Inc. (Flagstar), representing $209.5 million of collateral across 18 CDOs. As Fitch reported in the TruPS Index report dated July 19, 2016, Flagstar raised capital from the issuance of senior debt securities together with a dividend from its subsidiary Flagstar Bank, FSB, to repay approximately $31 million of deferred interest accrued since January 2012.

In addition to Flagstar, seven banks, across eight CDOs represented the remaining $54 million of cures in the month of September.

In September, seven performing issuers representing $156 million across 10 CDOs redeemed their TruPS. The majority of the redemptions came from Zions Bancorporation which redeemed $115 million across seven CDOs. Additionally, four cured issuers with a combined notional of $33 million in four CDOs redeemed their TruPS.

One defaulted issuer with total notional of $5 million was sold from one CDO portfolio with no realized recovery. Furthermore, one issuer that has been deferring since November 2009, representing $7 million in one CDO, was sold realizing a recovery of 9.6%.

Two issuers, representing $23.5 million of notional in four CDOs re-deferred. There were no new deferrals or defaults in September.

Across 73 Fitch-rated Bank and mixed Bank & Insurance TruPS CDOs, 219 defaulted bank issuers remain in the portfolio representing approximately $4.9 billion of collateral. As of September 2016, 79 issuers are deferring interest payments on $627 million of collateral compared to 112 issuers deferring on $1.4 billion of notional at the end of September 2015.