NEW YORK, Feb 28 (Reuters) - The Federal Reserve Bank of New York on Tuesday was holding an auction for the remaining portion of bonds underpinned by subprime home loans acquired in the 2008 rescue of American International Group Inc, two sources familiar with the process said.
Units of Morgan Stanley, Credit Suisse Group AG , Royal Bank of Scotland Group Plc, Barclays Plc and Bank of America Corp took part in the auction for the assets worth about $7 billion notional, one of the sources said.
The auction is the third this year, underscoring Wall Street’s heavy demand for the bonds.
Goldman Sachs Group Inc, which bought $6.2 billion worth of the bonds earlier this month, was not involved in the New York Fed’s latest auction, said one source.
The winning bidder is expected to quickly sell the bonds to clients such as hedge funds.