American International Group's life insurance companies have followed through with a Federal Reserve Bank of New York (FRBNY)-assisted plan to sell their interests in a $39 billion pool of residential MBS to a newly-formed limited liability company in a move that AIG said will address liquidity issues associated with its U.S. securities lending program.

The FRBNY is the sole member in the LLC, Maiden Lane II. The RMBS had been held by AIG's agent, AIG Securities Lending Corp., in connection with AIG's U.S. securities lending program. In addition to addressing liquidity issues, AIG said the creation and launch of the financing entity will "facilitate" its efforts to repay its federal loan facility.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.