The Federal Reserve Bank of New York was successful again Thursday in selling to the market more of American International Group's (AIG) most speculative assets.
The Fed announced that Citigroup had purchased $1.67 billion in residential mortgage-backed securities (MBS) that the U.S. acquired from AIG in 2008 in return for cash.
The securities were held in the so-called Maiden Lane III facility established by the Fed to help fund the operations of AIG's controversial Financial Products subsidiary. The securities were part of the Duke Funding High Grade I Ltd. collateralized debt obligation (CDO).
They were originally packaged and sold in 2005 by Wachovia, a North Carolina-based megabank that later got into trouble and eventually was merged with Wells Fargo by federal regulators.
The auction had been postponed from May 17 because technical documentation issues were found.
