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Fed Rejects AIG's Offer to Buy Back Mortgage Bonds

Source: AP

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Posted on 31 Mar 2011

The Federal Reserve Bank of New York said no to American International Group's (AIG) offer to repurchase mortgage bonds that the Fed had taken off the insurer's hands during the financial crisis.

AIG had offered $15.7 billion for the bonds. But the Fed thinks it can do better by having companies competitively bid on the mortgage bonds over time.

The economy and financial conditions have improved since the crisis. The Fed says there is a “high level” of interest in the bonds by investors.

When the Fed extended a lifeline of $182 billion to AIG in 2008, it also took over a portfolio of soured mortgage bonds that AIG had held. AIG is repaying the government by selling some of its businesses.


Comments

 
larry neilson  Mar 31 2011 4:50PM Report Abuse
I don't usually agree with The Fed. But bully for them!
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