The Federal Reserve Bank of New York may be looking to resume sales from it Maiden Lane II portfolio, according to several market reports.
In June last year, the Fed halted auctions of its ML II portfolio given the market condition for non-agency RMBS at the time. However, the bank did say that when the time was right it planned to resume the sale of securities from the ML II portfolio individually and in segments.
According to a Bloomberg report, the latest bid comes from Goldman Sachs who is looking to buy a block of the mortgage bonds under the Fed's ML portfolio.
The Bloomberg report said that the Fed might sell securities held by its ML II vehicle with a face value of about $7 billion. New York-based Goldman Sachs may have sought the bonds for itself or clients, they said. Four or five dealers may be asked to assemble bids this month, they said.
The Fed began selling of the portfolio last year in auctions that, at the beginning, were met with strong bids. As it continued with the sales however, appetite began to taper off, particulary for the lower rated pieces.
At the time, the auctions were largely seen as having pushed spreads wider in the non-agency RMBS space but also offered a level of price discovery to a market that had not seen much trading action in the months before.