A.I.G. Reaches Deal to Repay Treasury and Fed for Bailout

[sonomak]

Source: New York Times

The American International Group said Thursday that it had reached an agreement in principle to repay the Federal Reserve Bank of New York for the company’s 2008 rescue, and to gradually return the ownership of its stock to the public markets.

The company and its rescuers in the federal government have been working intently in recent weeks to complete such a plan before the expiration of the Treasury’s Troubled Asset Relief Program on Oct. 3, and before the Fed’s bailout loan came due. The original terms called for A.I.G. to pay back the Fed within two years. Under the plan, the Treasury Department will, for a time, own 92.1 percent of A.I.G. before it begins to sell it shares.

Because A.I.G. turned out to need a bigger rescue package than first expected, the Fed loan changed, and the insurance giant now owes the Fed about $46 billion in two forms: about $20 billion in borrowings under the original revolving credit facility, and a $26 billion preferred stake that the company must redeem. A.I.G. said it would repay those amounts by the end of March 2011.

The company said it would use its own resources to pay back the $20 billion in loans, including the proceeds it expects to receive from the sale of a big overseas life insurance unit to MetLife. That sale, announced in March, should yield $6.8 billion in cash and $8.7 billion in MetLife stock, and close by the end of the year.


Read more: http://www.nytimes.com/2010/10/01/business/01aig.html

[Demeter]

1. Thanks for the Post

Always nice to know what the crooks are up to.

[suston96]

2. I read through very quickly......

Is AIG paying any interest to the Fed?

[suston96]

4. AIG IS paying interest........

http://www.property-casualty.com/News/2010/9/Pages/AIG-Provides-Details-On-Plan-To-Repay-Taxpayers-With-A-Profit.aspx

AIG Provides Details On Plan To Repay Taxpayers With A Profit

By CHAD HEMENWAY
Published 9/30/2010 Subscribe to Property & Casualty

NU Online News Service, Sept. 30, 11:01 a.m. EDT

American International Group Inc. (AIG) has released details of its plan to pay back taxpayers for bailing out the mammoth company, gradually allowing the federal government to reduce its various forms of assistance to AIG.

The plan will allow AIG to “concentrate our full attention on managing our businesses for the benefit of all of our stakeholders,” said Robert H. Benmosche, president and chief executive officer, in a statement.

The chief executive said he also believes AIG will “repay the taxpayers with a profit.”

AIG said its $20 billion direct debt to the Federal Reserve Bank of New York (FRBNY) and the $26 billion in interest the FRBNY has in two special purpose vehicles (SPVs) will be repaid in full.

[defendandprotect]

3. Obviously, had AIG not enjoyed almost 0% interest by FED...they'd be out of business....

Because A.I.G. turned out to need a bigger rescue package than first expected, the Fed loan changed, and the insurance giant now owes the Fed about $46 billion in two forms: about $20 billion in borrowings under the original revolving credit facility, and a $26 billion preferred stake that the company must redeem. A.I.G. said it would repay those amounts by the end of March 2011.
This is just more capitalistic crime -- let's just let capitalism fail and MOVE ON!!

[AngryAmish]

5. Next Freddie and Fannie will pay us back.....

right.

[xchrom]

6. anybody hear what the life insurance unit they're selling is going for? nt