NY Fed opens bid on more AIG CDOs
The Federal Reserve Bank of New York opened more American International Group (AIG) CDOs for bidding.
The latest round makes available holdings in two Triaxx CDOs from the Maiden Lane III portfolio. The products insured residential mortgage-backed securities issued by Countrywide, which is now owned by Bank of America (BAC). The Fed said investment banks inquired into the availability of the products with enough fervor, so they opened it to bidding.
Last week, the Fed closed on a sale of AIG CDOs tied to commercial MBS.
This time, the Fed opened bidding to nine investment banks instead of eight. The newcomer is RBS Securities.
The two Triaxx CDOs held an original face value of $5.8 billion. According to Alison Frankel at Reuters, some of the products are tied to 26 Countrywide MBS trusts, making Triaxx a party to the still pending $8.5 billion settlement between BofA, the Bank of New York Mellon (BNY) and investors.
Several parties intervened in the suit, including those representing Triaxx. They claim the deal was not negotiated in good faith.
Still, the reverse inquiry to the Fed signals some appetite for Triaxx from Wall Street.
The Fed will take bids for its entire holdings in the CDOs until May 10.