The Federal Reserve Bank of New York has sold the entirety of the TRIAXX CDO holdings from its Maiden Lane III portfolio to Merrill Lynch, Pierce, Fenner & Smith after a competitive bid process.
Aside from Merrill, the other eight dealers asked by the NY Fed to bid were Barclays Capital, Citigroup Global Markets, Credit Suisse, Deutsche Bank Securities, Goldman Sachs, Morgan Stanley, Nomura Securities and RBS Securities.
The NY Fed decided to move forward with the sale only after determining that the winning bids represented good value for the public. This transaction further reduces the ML III portfolio and loan at a desirable price, the NY Fed said in a release.
"The winning bids, which were materially higher than the original prices ML III paid, demonstrate continued interest in these assets and represent good value for the public," said William Dudley, president of the NY Fed.
Consistent with the current investment objective of ML III, the New York Fed, through BlackRock Solutions, will continue to explore the sale of assets held by ML III.
This round of Maiden Lane III sales follows April’s auction of $7.5 billion of Maiden III MAX CDO holdings. Barclays Capital and Deutsche Bank Securities won the competitive bidding process for the entire MAX CDO holdings, which is collateralized by commercial mortgages acquired in the government's rescue of American International Group.
This morning Bloomberg also reported that Barclays and Morgan Stanley were the winning bidders on $1.5 billion of CDOs called WAVE 2007-1 and 2007-2. These deals are backed by commercial mortgages sold by UBS.
ASR had earlier reported about how dealers are trying to collapse both the MAX and WAVE CDOs. For the full report, please click here.