The sale from the Maiden Lane II portfolio came just weeks after the New York Fed sold $7 billion to Credit Suisse Group AG in a similar transaction, which included just a handful of invited bidders including Goldman Sachs. This time, Goldman beat out Credit Suisse, Barclays Capital, Morgan Stanley and Royal Bank of Scotland PLC.
The so-called private-label mortgage bonds are a key barometer for risk appetite since they are among the most-distressed debt securities that can be actively traded, and they have produced both double-digit gains and losses since the financial crisis. Unlike Fannie Mae and Freddie Mac mortgage bonds, their credit isn't government-guaranteed.
The resumption of sales from the Maiden Lane II portfolio last month followed a punishing year for the bonds, led by 30% declines for some subprime issues. A series of New York Fed auctions for individual bonds in the second quarter of 2011 was initially well-received but saw less interest midyear on a general increase in risk aversion.
Private-label mortgage bond prices have remained firm since the sale last month, encouraging investors.
The $6.2 billion transaction was prompted by an unsolicited offer from Credit Suisse, the New York Fed said in a statement.
