Entangled two-mode Gaussian states constitute an important building block for continuous variable quantum computing and communication protocols. In this work, we theoretically study two-mode bipartite states which are extracted from multimode light generated via type-II parametric down-conversion (PDC) in lossy waveguides. For these states, we demonstrate that the squeezing quantifies entanglement and we construct a measurement basis which results in the maximal bipartite entanglement. We illustrate our findings by numerically solving the spatial master equation for PDC in a Markovian environment. The optimal measurement modes are compared with two widely-used broadband bases: the Mercer-Wolf basis (the first-order coherence basis) and the Williamson-Euler basis.

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