Comments on: Inside the AIG CDO LLC Facility

By: jck

jck — Wed, 17 Dec 2008 11:09:59 +0000

$55.1 bn is the notional exposure as of september 30th for multi sector CDOs with subprime and $16.5 bn is the notional for multi sector CDOs without subprime, the q/q change is in the third column., the larger notional amount of $250 bn has nothing to do with subprime or multi-sector CDOs, it is reg arb with banks on portfolio of loans.
see page 15:
http://media.corporate-ir.net/media_files/irol/76/76115/reports/aigpres.pdf

By: Amicus

Amicus — Wed, 17 Dec 2008 03:00:56 +0000

correction: those figures, just above, refer to the q/q/ *changes* in their portfolio. The net notional amounts are a lot larger.

By: Amicus

Amicus — Thu, 04 Dec 2008 18:33:49 +0000

btw, from the AIG 30-Sept presentation, $55.1 B is what they list as the net notional CDS “super senior” exposure to what they call multi-sector CDOs with sub-prime exposure.

There is another $16.5 B w/o subprime exposure.

It looks like they targeted the sub-prime bit, given that the notionals are so close, but the company hasn’t provided any details (that I know), yet.

By: Amicus

Amicus — Thu, 04 Dec 2008 18:24:09 +0000

I just thought this was a positive development, because it eliminates an uncertainty hanging over AIG’s P&L:

“AIGFP, the LLC and the New York Fed have entered into agreements with AIGFP’s credit derivative counterparties to terminate approximately $53.5 billion notional amount of credit derivatives and purchase the related multi-sector CDOs.”

Of course, you could argue that it has emboldened them to ask for a better deal, for increasingly better terms, but so what if they do, so long as they are steps closer to getting off life support?

As for what price was paid for the CDO collateral in order to facilitate an termination/unwind, who cares, so long as it is reasonable?

By: Matt_Swanholm

Matt_Swanholm — Thu, 04 Dec 2008 03:06:14 +0000

Perhaps, if the desired destination is Fed insolvency.

The Fed can’t possibly be trusting that these (I’m assuming) “super-senior” assets are as riskless as the rating agencies suggest, can they? They would be the last people on earth to believe so.

Bloomberg really needs to win their FOI suit so we can find out what’s going on here….

By: Amicus

Amicus — Thu, 04 Dec 2008 01:38:27 +0000

How do you take this deal?

When I first read it, I thought that it was a step in the right direction.