The Federal Reserve Bank of New York is selling assets from 11 CDOs forming part of its Maiden Lane III (ML III) portfolio. Offering circulars were released yesterday.
The first round of bids will be due on June 25. Six CDOs are included in this bidding process: Davis Square Funding I, LTD. (with a $396,618,097 current face amount); Davis Square Funding VI, LTD. ($1,372,492,224); Fort Sheridan ABS CDO, LTD. ($615,686,553); Lakeside CDO II, LTD.($387,935,273); Monroe Harbor CDO 2005-1, LTD. ($1,074,942,786); and Streeterville ABS CDO, LTD. ($392,334,976).
Eight dealers are going to bid on these deals, including Barclays Capital, Credit Suisse, Deutsche Bank Securities, JPMorgan Securities, Merrill Lynch, Pierce, Fenner & Smith, Morgan Stanley, Nomura Securities International, and RBS Securities.
The second round of bids will be due on June 28 with Barclays, Citigroup Global Markets, Credit Suisse, Goldman Sachs, Merrill Lynch, Morgan Stanley, Nomura and RBS participating.
The five CDOs involved in this round are: Jupiter High-Grade CDO, LTD. ($98,573,158); Jupiter High-Grade CDO II, LTD. ($578,710,378); Jupiter High-Grade CDO III, LTD.($1,331,410,487); Kleros Preferred Funding, LTD. ($522,915,461); and Kleros Preferred Funding II, LTD. ($607,833,189).
Previously, the New York Fed announced that its loans to Maiden Lane (ML) and ML III have been fully repaid with interest. The loans’ original totals were $28.82 billion and $24.3 billion, respectively. Meanwhile, ML II's oblgiations were repaid earlier in 2012.
“This is a major milestone for the Bank and for the public," William C. Dudley, president of the New York Fed, said about the repayment. "The successful repayment of the New York Fed’s loans to ML LLC and ML III LLC marks the retirement of the last remaining debts owed to the Bank that stemmed from the crisis-era interventions with Bear Stearns and AIG. The Maiden Lane entities were established to protect the U.S. economy at a time of great economic stress, and I am pleased we were able to accomplish that policy objective and be fully repaid.”
The proceeds from future ML sales will be used to retire the subordinated loan extended by JPMorgan Chase. The New York Fed will then receive all residual profits and will use the proceeds from future ML III sales for repaying the equity contribution extended by AIG. After this, the New York Fed will then receive two-thirds of the residual profits from the sales.