American International Group said a federally financed operation has been launched to help it deal with its debt problems and it is selling an interest in a natural gas firm.
Maiden Lane III (MLIII), a financing entity created by the Federal Reserve Bank of New York, it was explained was designed to purchase Multi-Sector credit debt obligation (CDO) exposure on which American International Group has written credit default swap (CDS) contracts.
The creation of ML III was announced last month, along with a separate entity, Maiden Lane II, which will hold residential mortgage-backed securities (RMBS) from AIG's securities lending collateral portfolio.
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