The Federal Reserve Bank of New York just announced that it sold $7.5 billion of debt obligations that had been collateralized and tied to Bank of America Corp. (NYSE: BAC)

In a statement that was read to the public, New York Fed said that it the bid that won had represented the best value for the public.

The winning bid was chosen from among nine broker dealers who were invited to bid for the CDOs named Triaxx, in their original portfolio; Maiden Lane III LLC. These securities were acquired in 2008 in a government rescue of American International Group, Inc. (NYSE:AIG) .

According to a number of sources, there were at least three teams of Wall Street companies that were competing to get the securities. The teams were created so that there could be reduced risk, and also so that more investors could be reached via the combined resources. Goldman Sachs Group, Inc. (NYSE:GS), Credit Suisse Group AG (ADR) (NYSE:CS) and Citigroup Inc. (NYSE:C) joined up to create a single team, and Nomura Holdings Inc., Bank of America Corp. (NYSEBAC) and Morgan Stanley (NYSE: MS) formed another team.

The terms of the sales stated that the winning bidder or team had to buy the whole portfolio, as opposed to previous AIG portfolios that were mostly made up of home loans. However, when the portfolio was bought, the winning team had the pleasure to sell the CDOs as a whole, or simply put them apart and then sell the securities within.

After the announcement shares for AIG jumped 56 cents to reach $33.7, showing an increase of 1.7%. The pair of CDOs which had been named MAX was valued at one point the Fed at $4.2 billion.

This was the first sale of the Maiden Lane III portfolio, after the Maiden Lane II portfolio was unloaded early this year in February. In AIG’s bailout, the Maiden Lane II vehicle held residential mortgage assets, and these debts were unloaded last year public auctions, which were stopped for a time, after it was found that the sales was destroying the credit markets. The problem was solved when the government sold the remaining portfolio by using a few dealers. In the Maiden Lane II portfolio, tax payers earned over $2.8 billion over the initial loan of $19.5 billion.

In the total sale of the AIG bailout, the government is expected to make more than $15.1 billion in profits over its take over of American International Group. However, the figure is tentative as there are a number of factors that could affect the sales of the various portfolios in the group. The AIG shares were gotten in the 2008 bailout in which the government spent $182 billion, and at the time was the biggest single corporation rescue.

The sale this week of the Maiden Lane III LLC stock means that equity for the tax payer in AIG has reduced to 61%. This is however expected to reduce over time as new stocks are sold, and the Fed recovers what it had spent in the bailout.