In yet another Wall Street meltdown, floundering insurance giant American International Group has turned to the federal government in a bid to stave off a threatened credit-rating downgrade that could trigger the firm’s immediate collapse, reports the New York Times. AIG has requested a $40 billion bridge loan from the Federal Reserve and is trying to sell off its most valuable assets—including its domestic automotive business and its annuities unit.
AIG executives refused a weekend bail-out bid from private investment firm J.C. Flowers & Co. because the deal would have effectively given the firm complete control over AIG. The Fed, which doesn't typically work with insurance companies, has yet to decide on AIG’s loan request. The company has already raised $20 billion in fresh capital this year—but also saw its stocks tumble nearly 80%.