Ailing AIG Nears $30B Deal With Feds

By Neal Colgrass,  Newser Staff
Posted Feb 28, 2009 7:22 PM CST
Ailing AIG Nears $30B Deal With Feds
In this Sept. 16, 2008 file photo, an American International Group office building is shown in New York.   (AP Photo/Mark Lennihan, File)

(Newser) – Facing a roughly $60 billion fourth quarter loss—the biggest in corporate history—American International Group is cutting a deal with the feds to stay alive, Reuters reports. If AIG's board approves the agreement tomorrow, Washington will give the insurer another $30 billion in equity and a lower interest rate on its current $60 billion credit line.

Other details include:

  • Removing the interest rate floor on AIG's government loan—3% above Libor—to save the company about $1 billion per year.
  • Mandating that AIG pay back the Federal Reserve with ownership interests in American Life Insurance and American International Assurance.
  • Opening the door for AIG to pay off more debt with securitized life insurance policies.
The proposal comes as AIG tries to sell assets and plans to announce its massive quarterly loss on Monday.



(Read more AIG stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
X
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.

X