The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Credit market’s taste for the toxic returns

Having spurned AIG’s approach, the New York Fed is under pressure to achieve top dollar.

The sale by the Federal Reserve Bank of New York of three tranches of non-agency US RMBS in New York by mid-April was a stark illustration of the extent to which the securitization market has rallied in the US. The assets on the block were part of the Maiden Lane II portfolio that the New York Fed bought from stricken insurer AIG in October 2008. In the three sales the agency successfully offloaded securities with a face value of nearly $2.5 billion – ably demonstrating the kind of credit market buoyancy that $2 trillion of quantitative easing will buy.

The assets that went under the hammer are part of the New York Fed’s November 2008 bailout of AIG. With Maiden Lane II it acquired sub-prime RMBS assets with a face value of about $40 billion at about 50 cents on the dollar. (The New York Fed subsequently pumped a further $24.3 billion into AIG to buy a portfolio of CDOs, Maiden Lane III. The original $28 billion Maiden Lane loan in March 2008 facilitated the bailout of Bear Stearns). The face value of the entire Maiden Lane II pool was $16.4 billion on December 31 last year.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree