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 (NYSE: AIG) assets to Credit Suisse (NYSE: 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 (NYSE: GS) made an offer for the assets earlier this month, prompting an auction that would come to involve Goldman, Credi Suisse, Barclays (NYSE: BCS) and Bank of America's (NYSE: 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.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.