The Federal Reserve Bank of New York (New York Fed) today announced that it has sold the entirety of the MAX CDO holdings from its Maiden Lane III LLC (ML III) portfolio to a consortium consisting of Barclays Capital Inc. and Deutsche Bank Securities Inc. following a competitive bid process.
The New York Fed decided to move forward with the transaction only after determining that the winning bid represented good value for the public. This transaction substantially reduces the ML III portfolio and loan at a desirable price.
"I am pleased with the level of interest and the results of this process, especially with the strength of the winning bid, which represents good value for the public and significantly exceeds the original price ML III paid for these assets,” said William C. Dudley, President of the New York Fed. “This successful sale marks another important milestone in the wind-down of our crisis-era intervention.”
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. There is no fixed timeframe for future sales; at each stage, the Federal Reserve will sell an asset through a competitive process and only if the best available bid represents good value, while taking appropriate care to avoid market disruption.
Information regarding each subsequent sale will be posted on the ML III section of the New York Fed’s web site. The information that will be provided will include the circulation date of the offering, bid submission deadline, CUSIP(s) and current face amount offered, and, if a sale is executed, the name of the buyer and trade date of the sale.
In addition, as part of its regular disclosures, the New York Fed will provide a list of any holdings sold by ML III within the previous month. It will also provide quarterly updates on total proceeds from sales, including a breakdown by counterparty. Proceeds from the sale of the MAX CDO holdings will be captured in the quarterly report scheduled for July 16, 2012.
After ML III sells its last position, the New York Fed will provide further details regarding these transactions, ensuring timely accountability without jeopardizing the ability to generate maximum sale proceeds for the public.
For more information, including the most recent holdings report as of February 29, 2012 visit Maiden Lane III LLC.