CS, BofA, Citi win Maiden Lane III auctions totaling $5.2 bn
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.
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