WASHINGTON (MNI) – Following is the text of a statement released
Wednesday by the New York Federal Reserve announcing the Federal Reserve
has declined American International Group’s offer to purchase Maiden
Lane II LLC assets in block:

The Federal Reserve today announced that it has declined American
International Group’s (AIG) offer to purchase all of the assets in
Maiden Lane II LLC (MLII).

After careful review, the Federal Reserve Bank of New York (New
York Fed) and the Board of Governors of the Federal Reserve System
(Board) judged that the public interest in maximizing returns from any
sale and promoting financial stability would be better served by an
alternative approach to realizing value that is also more consistent
with normal market practice.

In light of improved conditions in the secondary market for
non-agency residential mortgage backed securities (RMBS), and a high
level of interest by investors, the Federal Reserve believes that
conditions are right for ML II to begin more extensive asset sales while
taking appropriate care at all times to avoid market disruption. In
light of this decision, the New York Fed has changed the investment
management objective for ML II consistent with such sales.

The New York Fed, through its investment manager, BlackRock
Solutions will dispose of the securities in the ML II portfolio
individually and in segments over time as market conditions warrant
through a competitive sales process. There will be no fixed timeframe
for the sales and at each stage the Federal Reserve will only transact
if the best available bid represents good value for the public.

Offering the Maiden Lane securities for sale individually and in
segments rather than as a single block will give a larger set of
investors opportunity to bid for the assets. The Federal Reserve
believes that this will maximize sale proceeds while also reducing the
likelihood that any one institution ends up with concentrated exposure
to these assets.

BlackRock Solutions will offer the securities for sale using the
standard bid list process in the secondary market for RMBS securities.
The bid list process involves marketing a list of securities from the
portfolio via multiple broker dealers to obtain the best available price
for each security.

Over time, the Federal Reserve will also entertain investor
inquiries to acquire specific parcels of securities where these offer
superior value, though no such bid will be accepted without being put
into competition with other interested investors. In such cases,
investors may submit offers for parcels of securities directly (without
necessarily going through a dealer.)

BlackRock Solutions is expected to circulate the first bid list
sale early next week. Inquiries relating to the sales process can be
made at ML2inquiries@blackrock.com. In keeping with the Federal
Reserves commitment to enhanced transparency information will be
released as soon as is practicable, while preserving the effectiveness
of the asset disposition process.

The New York Fed already publishes on its website a list of all the
securities in its portfolio. In order to allow the public to track
progress on asset dispositions, the New York Fed will provide monthly
updates on portfolio holdings and a list of the securities sold within
the prior month. In addition, it will provide quarterly updates on total
proceeds from sales, and the total amount purchased by each
counterparty. Finally, the New York Fed will provide further details
regarding these transactions, including an account showing the acquirer
and the price paid for each individual security three months after the
last asset is sold, ensuring timely accountability without jeopardizing
the ability to generate maximum sale proceeds for the public.

For more information visit Maiden Lane II LLC, including the most
recent holdings report as of February 28th, 2011, vist

http://www.newyorkfed.org//markets/maidenlane.html#maidenlane2

** Market News International Washington Bureau: 202-371-2121 **

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