Credit Suisse has outbid rival firms, including Goldman Sachs, for about portion of bonds the New York Fed acquired from AIG in 2008, the WSJ reports.
While the price of the sale was not disclosed, Credit Suisse likely paid more than the $3 billion Goldman was previously rumoured to have bid. The bonds have a total outstanding principal of $7 billion. The move leaves the NY Fed with approximately another $17 billion in AIG assets from the same debt vehicle on its books.
Goldman is likely to feel particularly aggrieved, because it first proposed the structure of the transaction and was the firm firm in this most recent process to the NY Fed with a firm bid for the assets:
The sale to Credit Suisse is likely to come as a disappointment to Goldman, which had proposed the idea of a one-off sale of a large block of securities to a dealer that could in turn resell the securities to interested investors on their own timetables, thus minimising any market impact. The New York Fed, however, didn’t want to sell the parcel to Goldman without soliciting other bids…
…In a statement Thursday, the New York Fed said it believed the winning bid “represented good value for the public” and plans to report how much Credit Suisse paid in mid-April. As of last week, the Fed was owed $6.6 billion on the Maiden Lane II assets.