New York Fed postpones Maiden Lane II sales
As anticipated as early as May 2010, the New York Federal Reserve is postponing its bond sales of American International Group (AIG) assets, citing adverse market conditions. "We do not anticipate any sales of bonds in the near term or until such time as the New York Fed deems it will achieve value for the public," said a spokesman for the central bank. "At such time, the New York Fed through BlackRock Solutions, as investment manager, may resume the sale of securities from the ML II portfolio individually and in segments over time as market conditions warrant through a competitive sales process," the spokesman added. "There will be no fixed time frame for the sales." Maiden Lane II is one of several residential mortgage securitization platforms created by the Fed to clear toxic assets assumed in the government bailout of AIG. Sources told HousingWire of the Fed's expected postponement of Maiden Lane II bond sales. AIG at one point offered to buy back the assets. The Fed instead chose to unwind Maiden Lane II via the secondary market. Some bond traders complain that the offerings are pressuring the market and pushing spreads wider. The New York Fed first explained its decision on a call to broker-dealers this afternoon. Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.