Citigroup Wins Mortgage CDO in New York Fed Auction

Mortgage & Real Estate

The Federal Reserve Bank of New York has confirmed that Citigroup won the latest bidding process for another portion of the Maiden Lane III portfolio.

The latest sale includes $1.6 billion of collateralized debt obligations (CDOs) tied to home loans known as ‘Duke Funding High Grade I Ltd.’

The auction was originally scheduled for late last week, but was postponed after the Fed became aware that there was additional information concerning the Duke CDO that had not been made available to all bidders.

Citigroup also emerged as winning bidder earlier this week on the auction of $691 million of assets from the Putnam CDOs in the Maiden Lane III portfolio.

Broker-dealers participating in the auction include Deutsche Bank Securities, Goldman Sachs, Guggenheim Securities, Merrill Lynch, Morgan Stanley and RBS Securities.

The Fed revised its investment objective for the Maiden Lane III’s portfolio in April 2012 to allow for the exploration of sales of the assets held in the portfolio. The New York Fed acquired the CDOs in the 2008 bailout of insurance conglomerate American International Group.

Leave a Reply