By Al Yoon
Bank of America's Merrill Lynch unit on Wednesday bought $1.93 billion
of complex residential mortgage securities from the Federal Reserve
Bank of New York's financial crisis-era portfolio, the New York Fed
said on its website.
The sale of two collateralized debt obligations known as Altius I
Funding and Altius II Funding raises the total face amount sold from
the Maiden Lane III portfolio to about $14 billion this year.
The portfolio, which has about $35 billion in face value of assets
remaining, includes CDOs taken on as part of the bailout of American
International Group in 2008.
The sales have become barometers, of sorts, for residential and
commercial mortgage securities because of their large scale. The bonds
are the type of non-guaranteed securities that have gyrated in value
since 2008 as the vagaries of the real estate recovery makes them
difficult to assess, and as they've been especially sensitive to
broader economic events that have roiled financial markets.
RMBS have lost value in recent weeks but have held up better than
other risky debt, according to analysts at Bank of America Merrill
Lynch. Some investors, including mortgage real estate investment trust
Two Harbors Investment Corp., said prices have steadied because the
housing market is bottoming and many funds have been raising money to
buy the securities.
The New York Fed earlier this year wound down a separate portfolio of
residential mortgage bonds, following sales of about $20 billion in
January and February.
Write to Al Yoon at albert.yoon@dowjones.com
(END) Dow Jones Newswires
June 13, 2012 12:46 ET (16:46 GMT)
No comments:
Post a Comment