N.Y. Fed taps 5 banks to bid for AIG bonds: WSJ

NEW YORK (Reuters)—The Federal Reserve Bank of New York has invited five banks to bid for mortgage bonds of insurer American International Group Inc., the Wall Street Journal reported.

The five banks selected were the U.S. securities units of Barclays P.L.C., Credit Suisse Group A.G., Goldman Sachs Group, Morgan Stanley and Royal Bank of Scotland P.L.C.

The Fed could sell the residential mortgage bonds from its Maiden Lane II portfolio around Feb. 8 if a favorable offer comes through, the report said, citing people familiar with the matter.

The Maiden Lane II portfolio was created to absorb risky mortgage securities from AIG and help prevent the collapse of what was then the world's largest insurer.

In March last year, the New York Fed had rejected a $15.7 billion bid from AIG, saying it would sell off the bonds over time instead.