As previously reported by StructuredFinanceNews.com (see related story via this link), last week the American International Group (AIG) in a letter to the Federal Reserve Bank of New York (New York Fed) offered to repurchase all of the RMBS held by Maiden Lane II LLC (ML II) for $15.7 billion in cash.

According to a Moody's Investors Service report, this deal would be near term credit negative for AIG and its core insurance operations, considering that most of the portfolio comprises subprime and Alt-A RMBS with considerable loss potential. This risk would be lessened by the low purchase price and the incremental investment income resulting from these securities such that the group’s ratings would not be affected.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.