NEW YORK (MNI) – The following is the text of a statement by the
New York Federal Reserve Bank Monday, announcing its plans to begin
conducting what it describes as “a limited amount” of agency MBS swaps
to facilitate a timely settlement of Federal Reserve’s MBS purchases:
This week, the Federal Reserve Bank of New York Open Market Trading
Desk (the “Desk”) will begin conducting a limited amount of agency
mortgage-backed security (MBS) coupon swap operations in order to
facilitate the timely settlement of the Federal Reserve’s agency MBS
purchases.
A coupon swap is a standard market transaction involving an
agreement to purchase one agency MBS and a simultaneous agreement to
sell a different agency MBS. The Desk plans to swap unsettled Fannie Mae
30-year 5.5 percent coupon securities (“Fannie Mae 5.5″) for other
agency MBS that are more readily available for settlement.
The operations will begin on or around Tuesday, June 29, will be
conducted as expeditiously as market conditions allow, and are not
expected to exceed the unsettled amount of $9.2 billion in the Fannie
Mae 5.5.
In addition, the Desk may continue to arrange dollar roll
transactions as needed to facilitate settlement. For more details on
agency MBS purchase operations, see the program’s frequently asked
questions at http://www.newyorkfed.org/markets/mbs_FAQ.HTML.
** Market News International New York Newsroom: 212-669-6430 **
[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$,M$$AG$,MN$MO$,MAU0B$]
