NY Fed Halts AIG (AIG) Mortgage Bond Sales on Complaints of Market Dilution
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The New York Fed is halting sales of American International Group (NYSE: AIG) mortgage bonds it acquired in the financial bailout due to complaints that the auctions were damaging credit markets.
Commenting on the halt in Maiden Lane bond sales Fed spokesperson Jack Gutt stated, "Given prevailing market conditions...we do not anticipate any sales of bonds in the near term or until such time as the New York Fed deems it will achieve value for the public."
Piecemeal sales began shortly after rejecting a $15.7 billion by AIG for the entire pool in March.
The sales created declines in debt ranging from high-yield bonds to subprime-mortgage securities, according to trader complaints.
The last New York Fed auction ended on June 9th.
Stoppage of the sales will be a positive for the market over the short-term, one money manager stated, but the debt will loom until it is cleared up.
No time frae on the sales has been set yet, though resumption is expected soon.
Commenting on the halt in Maiden Lane bond sales Fed spokesperson Jack Gutt stated, "Given prevailing market conditions...we do not anticipate any sales of bonds in the near term or until such time as the New York Fed deems it will achieve value for the public."
Piecemeal sales began shortly after rejecting a $15.7 billion by AIG for the entire pool in March.
The sales created declines in debt ranging from high-yield bonds to subprime-mortgage securities, according to trader complaints.
The last New York Fed auction ended on June 9th.
Stoppage of the sales will be a positive for the market over the short-term, one money manager stated, but the debt will loom until it is cleared up.
No time frae on the sales has been set yet, though resumption is expected soon.
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