The U.S. government and American International Group Inc. (NYSE: AIG) on Wednesday announced a deal to accelerate repayment of taxpayer dollars and clear the road for the company to reclaim its independence.
Terms of the arrangement, which were outlined in September, call for the company to borrow funds from the Treasury Department to repay the remainder of its debt owed to the Federal Reserve, leaving the Treasury holding the bulk of the beleaguered company's common stock.
Once the world's largest insurer, AIG received more than $180 billion of bailout funds from the government to help cover investments that vanished during the collapse of the U.S. real estate bubble.
The "definitive recapitalization agreement" signed by AIG "marks an important step forward in our progress toward completely repaying taxpayers," the company said in a statement.
Under the recapitalization plan, AIG "will have the right to raise up to $3 billion [and up to an additional four billion dollars with the consent of the Treasury Department] by August 15, 2011," AIG said in a filing with the U.S. Securities and Exchange Commission (SEC)....MORE
Sunday, December 12, 2010
AIG to Borrow from Treasury to Pay Fed as Part of Exit Plan
From Money Morning: