Hmm, you think if they didn’t mention it, the Feds would have just forgotten about this debt….?
Reuters via Economic Times: American International Group Inc, the insurer crippled by losses on bad mortgage bets, said on Friday it plans to sell as many assets as needed to repay up to $85 billion of borrowings from the US government.
However, AIG Chairman and Chief Executive Edward Liddy said in a conference call with analysts he didn’t expect a fire sale and buyers would have to assume the debt of AIG businesses they acquired.
The company, whose shares rose as much as 12.5 per cent in early trading, said it would focus in its property, casualty and foreign general insurance units, and was working on alternatives for its financial products business and its securities lending program.
And guess who wants to buy something at the yard sale?
Maurice Greenberg, former chief executive of AIG who left the company in 2005 following an accounting scandal, has asked Liddy for the chance to bid on AIG assets.
Once the world’s largest insurer, AIG accepted a federal bailout on September 16 — that would give the government 80 per cent ownership in the company — after losses in its financial products unit drove it to the brink of collapse.
No time like the present…
The deal carries high interest and fees, and borrowings must be repaid within two years.
The company also suspended dividends on its common stock.
…The company turned to the Fed after unsuccessful negotiations with several private equity firms and Warren Buffett’s Berkshire Hathaway.
AIG said it had drawn $61 billion on the Federal Reserve facility as of September 30 and used those proceeds to cover securities lending and ensure liquidity.
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