|AIG TRADING GROUP INC. FORMS AIG TELECOMMUNICATIONS LLC, A CENTRAL MARKETPLACE FOR TRADING FORWARD CONTRACTS ON MINUTES AND BANDWIDTH|
NEW YORK, August 9, 1999 - AIG Trading Group Inc., a member company of American International Group, Inc. (AIG), has formed AIG Telecommunications LLC (AIGT). The new organization will operate a central marketplace for wholesale telecommunications network capacity, creating the world's first forward delivery market for telecommunications minutes and bandwidth. AIGT was established to address the need for an efficient mechanism for commercial carriers and resellers to trade and deliver telecommunications network capacity, a need created by the growing deregulation and increased competition in the international telecommunications marketplace, coupled with the vigorous demand for, and uneven availability of, bandwidth.
AIGT will facilitate the trading and delivery of telecommunications network capacity by providing access to a worldwide series of nodes to interconnect the various telecommunications networks. AIGT will act as an intermediary to all transactions, by providing credit support to counterparts and allowing bandwidth and telephone minutes to be bought and sold anonymously as a "commodity." All participants will receive market information in real time over a secure Internet link.
To promote market liquidity, all trades are based on units of network capacity called Standard Telecommunications Units (STUs). The STU defines a measure of connection time or bandwidth that conforms to defined standards of circuit quality and other relevant performance criteria. Physical fulfillment of a trade can take place as long as one year into the future.
"By establishing an economic and telephonic infrastructure beneficial to the wholesale telecommunications marketplace, we plan to revolutionize the way bandwidth and 'minutes' are bought and sold today," says Dr. Eric L. Raab, Managing Director of AIGT. "We expect participants to gain material financial advantage as they utilize our efficient pricing, provisioning, and settlement systems. AIG Trading Group Inc. has spearheaded the development of markets in other commodities such as electricity and natural gas, and their experience has been instrumental in making telecom trading a reality."
AIG Trading Group Inc., through its subsidiaries, engages in market making and trading activities in foreign exchange, interest rates, base and precious metals. It provides risk management services to multinational corporations, financial institutions, commercial producers and users, institutional investors and sovereign entities.
For further information on AIGT, please contact Eric L. Raab at 203/861-6050 or firstname.lastname@example.org.
This description of AIG Telecommunications LLC and its business is for information only, and is not an offer to enter into any transaction. AIG Telecommunications LLC does not act as a fiduciary of financial, investment or commodity trading advisor for its counterparts, each of which is responsible for its own investment, hedging and trading decisions.