AIG to Cut Debt to Federal Reserve by $25 Billion |
| Bloomberg - Jun 25, 2009 |
American International Group Inc., the insurer bailed out by the U.S. four times, paved the way for two units to sell stock by agreeing to give preferred shares to the Federal Reserve Bank of New York and reduce its debt to the central bank by $25 billion.
The company will put the equity of life insurers American International Assurance Co. and American Life Insurance Co. into two special-purpose vehicles, New York-based AIG said today in a statement. The New York Fed, one of the government’s main supervisors of AIG, will receive $16 billion of preferred shares in the AIA unit, and a $9 billion stake in Alico, AIG said.
AIG has an outstanding balance of $40 billion on its credit facility from the New York Fed. The insurer first announced the transfer of the units to the government in March, after failing to sell them to corporate buyers amid the global recession. Alico and AIA are AIG’s biggest non-U.S. life insurance units.
Read Full Article from Bloomberg
- Posted: 2009-06-25 09:21:22
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