Filed Under:Annuities, Variable

AIG Adds $1.5B to Government Payback

(Mark Lennihan)
(Mark Lennihan)

American International Group Inc.’s (AIG) remaining debt to the U.S. government is about $45 billion after paying an additional $1.5 billion to the U.S. Treasury Department, the company says.

AIG says it used about $161 billion of the $182 billion made available in a government bailout to prevent the company’s collapse in 2008.

After this latest repayment—made one year ahead of schedule, says AIG—the Treasury’s ownership of the insurance conglomerate has been reduced to 70 percent.

The Treasury now owns $36.7 billion in AIG stock. It sold $6 billion in common stock it holds in AIG earlier this month.

The Federal Reserve Bank of New York (FRBNY) is still owed another $9 billion in a loan to Maiden Lane III, which holds collateralized debt obligations purchased by AIG Financial Products.

The $1.5 billion repayment retires the Treasury’s preferred interests in a special purpose vehicle (SPV) called AIA Aurora, created to hold ordinary shares of American International Assurance Co. Collateral against the AIA SPV—including an escrow account holding proceeds from its sale of ALICO to MetLife Inc.—has been released, says AIG.

To date AIG has also retired debts to the FRBNY Credit Facility and preferred interest in another SPV for American Life Insurance Co. (ALICO).  

“We promised the taxpayers they would be paid back at a profit, and so far we have met that goal,” says Robert H. Benmosche, AIG’s president and chief executive officer, in a statement.

In February the FRBY sold the last remaining securities held in the Maiden Lane II facility for a net gain of approximately $2.8 billion, including $580 million in accrued interest on the loan.

 

This article was originally reported on our sister publication, Property Casualty 360

Featured Video

Most Recent Videos

Behind the scenes with Vicki Gunvalson [VIDEO]

Provided by LIFEHEALTHPRO

In this exclusive interview, Vicki Gunvalson shares how she built a $15 million a year annuity business by planning for...

Regulator: Market may need to reinvent LTCI

Provided by LIFEHEALTHPRO

Cioppa says Maine's governor wants to spur the creation of better products.

Dementia: It's more than Alzheimer's

Provided by LIFEHEALTHPRO

An association calls for policymakers to remember lesser-known neurodegenerative conditions.

Protesters Disrupt WellPoint Annual Meeting

Provided by LIFEHEALTHPRO

Hecklers call for more disclosures of information about political contributions.

Related resources

More Resources

Comments

Power your business with up-to-the-minute insurance news, analysis, and best practices from LifeHealthPro Daily eNewsletter – FREE.

Power your business with LifeHealthPro Daily eNewsletter – FREE.

Enter a valid email address.
Close
Nichole Morford

Nichole Morford
Managing Editor

Thank you for subscribing to LifeHealthPro Daily!

Check Out More eNewsletters Now! Close

Advertisement. Closing in 15 seconds.