Related News
AIG given new plan and extra credit line
By Jeannine Aversa |
March 3, 2009, Tuesday
|
Print Edition
Print Edition
THE United States government yesterday unveiled a revamped rescue package to insurance giant American International Group and will provide the troubled company another US$30 billion on an "as needed" basis.
The new package comes as the firm has burned through cash and has been unable to find buyers for pieces of its company that it hoped to sell to repay the government on its existing aid package, which totals some US$150 billion.
In an interview on NBC television yesterday, AIG's chairman and chief executive Edward Liddy said, "We're going to be able to pay back the Federal Reserve. The new US$30 billion is a standby line. It's not necessarily something that we think we'll have to draw on right away."
The announcement came as AIG, once the world's largest insurer, reported yesterday that it lost US$61.7 billion in the fourth quarter, the biggest quarterly loss in US corporate history.
Under the new package, the Federal Reserve will take stakes in two international units.
Instead of paying back US$38 billion in cash with interest that it has used from a Federal Reserve credit line, AIG now will repay that amount with equity stakes in Asia-based American International Assurance Co and American Life Insurance Co, which operates in 50 countries.
It marked the fourth time that the government has stepped in to help AIG. Its initial lifeline came in September. The action was announced jointly early yesterday by the Treasury Department and the Federal Reserve.
The new package is designed to enhance the company's capital and liquidity to facilitate the "orderly completion of the company's global divestiture program," the agencies said.
They said that the company continues to face "significant challenges" due to the rapid deterioration in certain financial markets in the last two months of the year. "The additional resources will help stabilize the company and in doing so help stabilize the financial system," the agencies said.
AIG is a colossus on Wall Street and financial districts worldwide, with operations in more than 130 countries and US$1 trillion in assets.
The new package comes as the firm has burned through cash and has been unable to find buyers for pieces of its company that it hoped to sell to repay the government on its existing aid package, which totals some US$150 billion.
In an interview on NBC television yesterday, AIG's chairman and chief executive Edward Liddy said, "We're going to be able to pay back the Federal Reserve. The new US$30 billion is a standby line. It's not necessarily something that we think we'll have to draw on right away."
The announcement came as AIG, once the world's largest insurer, reported yesterday that it lost US$61.7 billion in the fourth quarter, the biggest quarterly loss in US corporate history.
Under the new package, the Federal Reserve will take stakes in two international units.
Instead of paying back US$38 billion in cash with interest that it has used from a Federal Reserve credit line, AIG now will repay that amount with equity stakes in Asia-based American International Assurance Co and American Life Insurance Co, which operates in 50 countries.
It marked the fourth time that the government has stepped in to help AIG. Its initial lifeline came in September. The action was announced jointly early yesterday by the Treasury Department and the Federal Reserve.
The new package is designed to enhance the company's capital and liquidity to facilitate the "orderly completion of the company's global divestiture program," the agencies said.
They said that the company continues to face "significant challenges" due to the rapid deterioration in certain financial markets in the last two months of the year. "The additional resources will help stabilize the company and in doing so help stabilize the financial system," the agencies said.
AIG is a colossus on Wall Street and financial districts worldwide, with operations in more than 130 countries and US$1 trillion in assets.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
