AIG said on Thursday it made the offer to the Federal Reserve Bank of New York for the residential mortgage-backed securities it gave up at the height of the financial crisis. The Fed on Friday confirmed it received AIG’s offer for the bonds, held in Maiden Lane II, an entity formed in late 2008 as part of AIG’s bailout.

For more than a year, the insurer has been preparing the offer on the bonds, whose values have soared despite rising foreclosures on the underlying loans. An index of top-rated subprime securities has rallied more than 50 percent since the depths of that market in April 2009, according to Amherst Securities Group. More >