The Federal Reserve Bank of New York sold collateralized debt obligations once held by American International Group (AIG) to Barclays Capital (BCS) and Deutsche Bank (DB).
The Fed opened bidding to eight investment banks last week. Many made collective bids on the assets.
The CDOs are linked to commercial mortgage-backed securities and were acquired by the NY Fed as part of the bailout of AIG. The assets fall under the Maiden Lane III portfolio.
“I am pleased with the level of interest and the results of this process, especially with the strength of the winning bid, which represents good value for the public and significantly exceeds the original price ML III paid for these assets,” said NY Fed President William Dudley. “This successful sale marks another important milestone in the wind-down of our crisis-era intervention.”
As of Dec. 31, MLIII held $17.8 billion in mostly high-grade ABS CDO along with other assets and mortgage bonds once held by the monoline. A total of $4.8 billion of it was commercial real estate CDO instruments.
The portfolio was reduced from a $27.1 billion total in December 2008.
The Fed said it would disclose proceeds from the CDO sale in a quarterly report due in July.
jprior@housingwire.com
