After posting a fourth straight quarterly loss, AIG received an expanded government rescue package in early November valued at more than $150 billion. The U.S. will reduce September's original $85 billion loan to $60 billion, buy $40 billion of preferred shares, and purchase $52.5 billion of mortgage securities owned or backed by the company. The insurer lost a record $24.5 billion, or $9.05 a share, in the third quarter, compared with profit of $3.09 billion, or $1.19, a year earlier, AIG said in a statement.
The U.S. also required a freeze on the bonus pool for 70 top AIG executives and imposed limits on severance benefits.
The insurer booked $7.05 billion in writedowns during the quarter on the value of credit default swaps and marked down other holdings by $18.3 billion before taxes. AIG's securities lending program accounted for $11.7 billion, or about two-thirds, of the $18.3 billion in impaired investments.
