NEW YORK, May 22 (IFR) - The New York Fed on Tuesday
announced that Credit Suisse had won the latest auction of
mortgage-linked collateralized debt obligations from its Maiden
Lane III portfolio of assets assumed from AIG during the
insurer's bailout in 2008.
Credit Suisse beat out six other broker-dealers
vying for $691 million in slices of the Putnam Structured
Product CDOs, which were put together in 2002 and backed by both
residential and commercial mortgage bonds.
In the run-up to today's auction, at least one of the
dealers, RBS, was pitching a so-called resecuritization of the
Putnam CDOs to investor clients, which would have restructured
the complex security into a form that contained a new Triple A
Today's Putnam CDO sale will be the first of two auctions
from Maiden Lane III this week. On Thursday, the Fed
will sell $1.67 billion in slices of the Duke High Grade Funding
CDOs after postponing the auction for these CDOs last week.
Last Thursday, the Fed postponed the Duke CDO sale due to
"There was additional information concerning the Duke CDO
that had not been made available for the bidders," the Fed said
last Friday in an explanation to the market of why the sale was
Citigroup, Deutsche Bank, Goldman Sachs, Guggenheim
Securities, Merrill Lynch, Morgan Stanley and RBS will be vying
for the Duke CDOs, which are backed by high-grade RMBS.
The Fed has successfully sold assets in both Maiden Lane II
and Maiden Lane III portfolios this year, reflecting higher
demand for such mortgage-backed securities that were at the
heart of the 2007-2009 financial crisis.
The Fed sold all of its "Triaxx" CDOs earlier this month,
which were the first CDOs sold out of Maiden Lane III that were
backed by RMBS. Merrill Lynch won that auction.
In April, Barclays and Deutsche Bank won the hard-fought
bidding for the two so-called Max commercial real estate CDOs
totaling $7.5 billion, backed by CMBS.