Goldman Sachs & Co. has started up a second, stand-alone derivatives subsidiary with triple-A ratings.

The new subsidiary, GS Financial Products US L.P., is designed to attract derivatives business from customers wary of Goldman's own single-A credit ratings.

The subsidiary will engage only in derivatives transactions that are exempt from U.S. securities laws, including interest rate swaps but not derivative products traded on exchanges.

Goldman has capitalized the new GS Financial with a book of existing swaps. The value of the subsidiary's equity capital, or assets minus its liabilities, is $1 00 million, a Goldman official said.

The firm may sell additional debt or equity to add capital if necessary, the official added.

Last year, Goldman unveiled GS Financial Products International L.P., capitalized with yen-denominated equity securities and a debt offering. The equity capital of the international subsidiary is also approximately $100 million, the Goldman official said.

While the international subsidiary, has concentrated on transactions outside of the U.S., the new subsidiary will vie for mostly domestic business. But the firm has not decided on the new subsidiary's exact lines of business. The new subsidiary could do municipal swaps or commodity-based swaps, a Goldman official said.

Standard & Poor's Corp. and Fitch Investors Service Inc. rate the new subsidiary triple-A.

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