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Bloomberg: Fed Seeks Bids for $7.49 Billion in CDOs from AIG Bailout

April 19, 2012, 07:00 AM
Filed Under: Industry News

Bloomberg Businessweek reported that the Federal Reserve Bank of New York is seeking bids for $7.49 billion of collateralized debt obligations linked to commercial mortgages it took on in the 2008 bailout of American International Group Inc. (AIG).

According to the report, the New York Fed invited eight broker-dealers to compete for the CDOs  after receiving “several” unsolicited bids for the holdings in its Maiden Lane III LLC portfolio. Bids will be due on April 26.  The district bank is considering selling securities that JPMorgan Chase & Co. analysts estimate may be worth as much as 25 percentage points more than where the Fed values them if the buyers were to break them into individual bonds..

The report states the banks invited to bid in this round are Barclays, Citigroup Inc., Credit Suisse, Deutsche Bank, Goldman Sachs, Bank of America Corp., Morgan Stanley and Nomura Holdings Inc., the Fed said in its statement.

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