By Adam Tempkin
NEW YORK, June 15 (IFR/Reuters) – Credit Suisse beat out six
other broker-dealers on Friday to win pieces of three different
CDOs of RMBS from the Fed’s Maiden Lane III portfolio.
Separately, Bank of America Merrill Lynch won one CDO, and
Citigroup beat out six competitors to win US$1.44bn of another
CDO.
Credit Suisse won US$2.8bn worth of CDOs: Davis Square
Funding, series II, III, and V. Bank of America Merrill Lynch
won the US$896m Davis Square Funding IV CDO. And lastly,
Citigroup won the US$1.44bn West Coast Funding I, LTD.
On Wednesday, Merrill Lynch, Pierce, Fenner & Smith, the
brokerage unit of Bank of America Merrill Lynch, won nearly
US$2bn worth of CDOs known as Altius I Funding and Altius II
Funding, which were originally created in 2005. They are backed
by residential mortgage bonds.
Today’s sale was the sixth in two months from the Fed’s
US$47bn (face value) portfolio of toxic assets assumed from AIG
during the government’s US$182bn bailout of the insurer
in 2008. There is currently less than US$15bn in fair value of
securities left in the portfolio.
The Federal Reserve Bank of New York said on Thursday the
last of its loans made to acquire risky assets from AIG and Bear
Stearns during the financial crisis have been paid off with
interest.
The Fed bank acquired the assets in the portfolio known as
Maiden Lane III in the 2008 government rescue of U.S. insurer
American International Group Inc. It acquired the Maiden Lane I
assets from Bear Stearns around the time of its takeover. The
original loans totaled just over US$53bn.
The New York Fed will continue to sell assets remaining in
the Maiden Lane I and III portfolios “as market conditions
warrant and if the sales represent good value for the public,”
it said, adding there is no fixed time frame for the sales.
