Treasury announces its plans to sell and wind down its GSE MBS portfolio

U. S. Department of the Treasury

Yale University

Yale University EliScholar – A Digital Platform for Scholarly Publishing at Yale YPFS Documents (Series 1) Browse by Media Type 3-21-2011 Treasury to Begin Orderly Wind Down of Its $142 Billion Mortgage-Backed Securities Portfolio U. S. Department of the Treasury Follow this and additional works at: https://elischolar.library.yale.edu/ypfs-documents Recommended Citation U. S. Department of the Treasury, "Treasury to Begin Orderly Wind Down of Its $142 Billion Mortgage-Backed Securities Portfolio" (2011). YPFS Documents (Series 1). 9994. https://elischolar.library.yale.edu/ypfs-documents/9994 This Document is brought to you for free and open access by the Browse by Media Type at EliScholar – A Digital Platform for Scholarly Publishing at Yale. It has been accepted for inclusion in YPFS Documents (Series 1) by an authorized administrator of EliScholar – A Digital Platform for Scholarly Publishing at Yale. For more information, please contact elischolar@yale.edu. U.S. DEPARTMENT OF THE TREASURYPress Center Treasury to Begin Orderly Wind Down of Its $142 Billion Mortgage-Backed SecuritiesPortfolio3/21/2011Treasury Will Authorize Sale of up to $10 Billion in Agency-Guaranteed Mortgage-Backed Securities per MonthPart of Continued Wind Down of Holdings Acquired as Part of the Financial Stabilization Actions in 2008 and 2009 to Help Combat the Financial CrisisWASHINGTON – Today, the U.S. Department of the Treasury announced that it will begin the orderly wind down of its remaining portfolio of $142 billion in agency-guaranteed mortgage-backed securities (MBS). Starting this month, Treasury plans to sell up to $10 billion in agency-guaranteed MBS per month, subject to market conditions.“We’re continuing to wind down the emergency programs that were put in place in 2008 and 2009 to help restore market stability, and the sale of these securities is consistent with thateffort,” said Mary J. Miller, Assistant Secretary for Financial Markets. “We will exit this investment at a gradual and orderly pace to maximize the recovery of taxpayer dollars and helpprotect the process of repair of the housing finance market.”Treasury acquired its portfolio of agency-guaranteed MBS under authority provided to it by Congress under the Housing and Economic Recovery Act of 2008. These purchases ofagency-guaranteed MBS helped preserve access to mortgage credit and promote economic stability during a period of unprecedented market stress and volatility.The market for agency-guaranteed MBS has notably improved since the time Treasury purchased these securities in 2008 and 2009.  Based on current market prices, Treasury expectsto make a profit for taxpayers on this investment. The sale of these securities will not alter our previously stated debt management objectives, nor change the path on which we intend toachieve those objectives.In 2008, Treasury retained State Street Global Advisors to acquire, manage, and dispose of its agency-guaranteed MBS portfolio. That firm will manage the wind down of thisinvestment. At the end of each month, Treasury will post on its website the total agency-guaranteed MBS sales it has made, broken down by coupon and agency.The sale of these securities is part of Treasury’s continued efforts to wind down emergency programs that were put in place in 2008 and 2009 to promote financial stability and restoreeconomic growth. On October 3, 2010, new Troubled Asset Relief Program (TARP) purchasing authority expired, and Treasury is moving to exit its remaining TARP investments inprivate companies. In December 2010, Treasury sold its final share of Citigroup common stock, locking in a profit of more than $12 billion on that TARP investment. General Motors’(GM) recent initial public offering cut Treasury’s common stock stake in that company nearly in half and brought in a total of $13.5 billion for taxpayers. Additionally, Treasury recentlyreceived $9.6 billion in TARP repayments through the sale of its Ally Financial trust preferred securities holdings and AIG’s sale of its MetLife equity stake.For a list of Frequently Asked Questions, please visit link .Treasury to Begin Orderly Wind Down of Its $142 Billion Mortgage-Ba... https://www.treasury.gov/press-center/press-releases/Pages/tg1111.aspx1 of 2 3/11/2021, 3:19 PM

Treasury to Begin Orderly Wind Down of Its $142 Billion Mortgage-Backed Securities Portfolio

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Treasury to Begin Orderly Wind Down of Its $142 Billion Mortgage-Backed Securities Portfolio

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