After the Federal Reserve Bank of New York made its initial offering in late April of its Maiden Lane III (ML III) holdings, it sold about 58% ($28 billion) of the portfolio, Barclays Capital analysts said in their most recent Securitized Products Weekly.
The Fed is planning to put on offer another 23% ($11 billion) of the ML III original portfolio in the next three weeks. If these transactions are successful, only roughly 19% or $9 billion in notional terms of the original portfolio will be left with ML III, they said.
Barclays analysts stated that of the $20 billion in bonds that the ML III portfolio now comprises, 67.3% is in RMBS and the remaining percentage is split between CMBS, ABS, and CDOs.
Since switching to an all-or-none format, analysts said that the ML sales have had nearly 100% execution thus far, demonstrating the strength of the non-agency demand for the majority of this year. In addition, the clamor for this collateral has been highlighted by ML III’s aim to sell only if the bid embodies good value and if does not create any market disruption.
Last summer, some of the Maiden Lane II subprime bid lists had approximately 50% “did not trade” or DNTs, and the sales were postponed indefinitely. These were then finalized only in January this year in the all-or-none format once again, analysts reported.
Aside from ML III, Maiden Lane I had also sold an added 5% of its original portfolio aside from the 75% it had already sold before the year had started. As of 1Q12, Maiden Lane had $3.7 billion in value split across different sectors such as CDOs, agency and non-agency MBS, whole loans, corporate bonds, commercial real estate loans and equity,