Toxic AIG Assets? Someone Wants Them

In what may come as a surprise to some, there's still a market for toxic assets from the financial crisis and that much was made clear today when the New York Federal Reserve, former stomping grounds of Treasury Secretary Timothy Geithner, sold $7 billion worth of old American International Group AIG assets to Credit Suisse CS. The assets were sold from the New York Fed's Maiden Lane II vehicle. That vehicle's holdings, which include A.I.G.'s soured residential mortgage-backed securities, were once worth roughly $30 billion, according to DealBook. Goldman Sachs GS made an offer for the assets earlier this month, prompting an auction that would come to involve Goldman, Credi Suisse, Barclays BCS and Bank of America's BAC Merrill Lynch unit, according to DealBook. The New York Fed did not disclose how much Credit Suisse paid for the assets, but did say the deal was a "good value for the public." At one point in 2010, the government's stake in AIG was equivalent to about 80% of the company or 90% when accounting for preferred stock. AIG, a former Dow component, has been forced to sell billions of dollars in assets to repay the U.S. government.