Three banks join forces to bid $7.5bn for Fed assets

24 April 2012

Three major global banks are set to join forces to launch a $7.5 billion takeover of risky assets held by the New York Federal Reserve (NYFR), it has emerged.

Goldman Sachs, Credit Suisse and Citigroup will pool together to purchase the Maiden Lane III insurance assets, which were acquired by the NYFR when it bailed out the insurance firm American International Group in 2008.

Last week, the body invited eight separate investment banks to follow up their interest in the package with formal bids and Goldman, Credit Suisse and Citigroup are now set to do so.

The assets consist of two collateralized debt obligations issued by Deutsche Bank in 2007 and 2008 and final bids for them need to be filed on Thursday (26 April) morning.

This is when investment manager BlackRock Solutions will conduct the formal transaction process, but the NYFR has insisted there is no set deadline for the deal's completion.

By Claire Archer

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