AIG May Get $30 Billion, Loans Relief in New Bailout
American International Group Inc., the insurer deemed too important to fail, may get as much as $30 billion in new capital and have debts to the U.S. forgiven in the firm’s third bailout, people familiar with the matter said.
AIG agreed to give stakes in its two biggest international life insurance divisions to the government to erase some of the New York-based firm’s approximately $37 billion in debt, said three people, who declined to be named because the plan hasn’t been announced yet. AIG may post a quarterly loss of about $60 billion tomorrow, the people said.
The insurer, first saved from collapse in September with a package that grew to $150 billion last year, had to ask for help again after failing to sell enough units to repay the U.S. Firms including banks relied on AIG to back more than $300 billion of assets through derivative contracts as of Sept. 30, making the company a “systemically significant failing institution” that has to be propped up, according to the Treasury.
[ Continue reading the original article on Bloomberg ]