AIG set to repay $37 billion in bailout money
In September, American International Group announced a plan to repay all the bailout money it received from the government during the financial crisis.
By Agencies |
NEW YORK: AIG says it has raised $37 billion from the recent sale of two foreign insurance units to help repay US government bailout money.
AIG says it closed its sale of American Life Insurance Co. Monday to MetLife Inc. for $16.2 billion. It said last week that it raised $20.51 billion through an initial public offering for AIA Group Ltd.
The money will go toward paying off the more than $100 billion in outstanding debt and aid that the financial services company still owes the government.
AIG said it would use the cash to repay the New York Fed credit facility and make other bailout-related payments to the government. AIG owed the New York Fed about $20 billion in principal and interest on the credit facility as of last week.
The proceeds from the deals are being put in escrow with the New York Fed until an AIG recapitalization deal, announced in September, closes in the first quarter of 2011.
That deal aims to accelerate AIG's payback of bailouts totaling $182.3 billion, while simplifying the bailout structure by repaying the New York Fed in full and leaving the US Treasury Department with a 92.1 percent stake in the company.
In late September, American International Group Inc. announced a plan to repay all the bailout money it received from the government during the financial crisis. The government will be converting some outstanding debt into common stock in the company as part of the repayment.
AIG says it closed its sale of American Life Insurance Co. Monday to MetLife Inc. for $16.2 billion. It said last week that it raised $20.51 billion through an initial public offering for AIA Group Ltd.
The money will go toward paying off the more than $100 billion in outstanding debt and aid that the financial services company still owes the government.
AIG said it would use the cash to repay the New York Fed credit facility and make other bailout-related payments to the government. AIG owed the New York Fed about $20 billion in principal and interest on the credit facility as of last week.
The proceeds from the deals are being put in escrow with the New York Fed until an AIG recapitalization deal, announced in September, closes in the first quarter of 2011.
That deal aims to accelerate AIG's payback of bailouts totaling $182.3 billion, while simplifying the bailout structure by repaying the New York Fed in full and leaving the US Treasury Department with a 92.1 percent stake in the company.
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In late September, American International Group Inc. announced a plan to repay all the bailout money it received from the government during the financial crisis. The government will be converting some outstanding debt into common stock in the company as part of the repayment.
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