AIG chief 'comfortable' about repaying
By Elinor Comlay |
April 3, 2010, Saturday
|
Print Edition
Print Edition
AMERICAN International Group Inc's chief executive said on Thursday that he is "pretty comfortable" the bailed-out insurer will be able to repay the government before the 2013 expiration of its credit line.
AIG, which has been selling assets to repay the United States government's US$182.3 billion taxpayer-funded rescue, nearly collapsed in 2008 from a liquidity strain caused by the need to make billions of dollars in collateral payments to banks that bought credit default swap protection from its financial products unit.
Robert Benmosche told Reuters selling the AIG units AIA to Prudential Plc and life insurance unit American Life Insurance Co to MetLife Inc will bring the company to a point at which it can begin formal discussions with the government about an exit.
"We haven't locked in a date (for repayment)," he said, noting the insurer's priority is to complete the asset sales.
"We think over the next 12 to 18 months we can see our way clear to working through some of our issues.
"The most important thing is to raise enough money so that we can pay back the Federal Reserve," he added in the telephone interview.
Earlier on Thursday, the US government named Donald Layton, former chief executive of E*Trade Financial, and Ronald Rittenmeyer, former chief executive of Electronic Data Systems, to serve on AIG's board.
Benmosche compared the government's involvement in AIG to the relationship between any creditor and lender.
"We run the company, they just keep an eye on things and make sure everything's OK," he said.
The insurer agreed earlier this month to sell Alico for about US$15.5 billion. The sale of AIA to Britain's Prudential for US$35.5 billion is "going well," Benmosche said.
The New York Post said on Wednesday that Prudential investors' were objecting to the AIA sale price.
AIG, which has been selling assets to repay the United States government's US$182.3 billion taxpayer-funded rescue, nearly collapsed in 2008 from a liquidity strain caused by the need to make billions of dollars in collateral payments to banks that bought credit default swap protection from its financial products unit.
Robert Benmosche told Reuters selling the AIG units AIA to Prudential Plc and life insurance unit American Life Insurance Co to MetLife Inc will bring the company to a point at which it can begin formal discussions with the government about an exit.
"We haven't locked in a date (for repayment)," he said, noting the insurer's priority is to complete the asset sales.
"We think over the next 12 to 18 months we can see our way clear to working through some of our issues.
"The most important thing is to raise enough money so that we can pay back the Federal Reserve," he added in the telephone interview.
Earlier on Thursday, the US government named Donald Layton, former chief executive of E*Trade Financial, and Ronald Rittenmeyer, former chief executive of Electronic Data Systems, to serve on AIG's board.
Benmosche compared the government's involvement in AIG to the relationship between any creditor and lender.
"We run the company, they just keep an eye on things and make sure everything's OK," he said.
The insurer agreed earlier this month to sell Alico for about US$15.5 billion. The sale of AIA to Britain's Prudential for US$35.5 billion is "going well," Benmosche said.
The New York Post said on Wednesday that Prudential investors' were objecting to the AIA sale price.
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