AIG has made an offer to repurchase, for $15.7 billion cash, mortgage-backed securities handed over to the New York Federal Reserve as part of its 2008 rescue, Financial Times reports. The New York Fed, in late 2008, formed Maiden Lane II to buy from AIG roughly 800 securities backed by mostly subprime home loans. The AIG offer, if accepted, will allow the regional Fed bank to be fully repaid on its loan to Maiden Lane II and gather a $1.5 billion profit under an arrangement they agreed to back in 2008. AIG will also be able to reduce its obligations to the government by about $13 billion, to $26 billion.
Click here for the story from Financial Times.
Click here for additional coverage from Reuters.