By Al Yoon
Credit Suisse (CS, CSGN.VX) bought four of six complex
mortgage-debt securities up for auction by the Federal Reserve Bank
of New York, according to the New York Fed's website. The assets,
which have a total face value of $4.2 billion, were taken on during
the 2008 bailout of American International Group (AIG).
The sales of the collateralized debt obligations raise the total
face amount sold from the portfolio known as Maiden Lane III to
about $23.4 billion this year. Credit Suisse bought nearly $3.5
billion of the CDOs, while Royal Bank of Scotland PLC's (RBS,
RBS.LN) RBS Securities and Morgan Stanley (MS) each bought one
other CDO.
The sales have become barometers for demand of residential- and
commercial-mortgage securities. The underlying bonds are the type
of nonguaranteed securities that have fluctuated in value since
2008 as the vagaries of the real-estate recovery make them
difficult to assess and as they've been especially sensitive to
economic events that have roiled financial markets.
But the mortgage bonds have held up better than other risky debt
in recent weeks, in part as the housing market shows signs of
bottoming and many funds have raised money to buy the securities
that offer high yields, analysts said.
The loan made by the New York Fed to fund the Maiden Lane III
portfolio already has been paid off after multiple sales. Loans
similar to crisis-era Maiden Lane portfolios have also been
repaid.
Write to Al Yoon at albert.yoon@dowjones.com