How would you like to lose $460,000 per minute. That's how much the $60 billion fourth-quarter loss amounts to for AIG. Remember, back in September 2008, American International Group Inc (NYSE AIG) imploded, so the government gave it $85 billion. That was not enough, so the government upped the ante to $123 billion. It still was not enough, so the government upped the ante again to $150 billion. It still was not enough, so now the government is adding another $30 billion.
The government is also making more lenient terms on an existing preferred investment and lower interest rate on a $60 billion government credit line. It is expected that the London Interbanks offered Floor Rate on the interest AIG pays to the government will be removed, saving the company $1 billion a year.
AIG will also give the U.S. Federal Reserve ownership interests in American Life Insurance (ALICO), which generates half of its revenue from Japan, and also Hong Kong-based life insurance group American International Assurance Company (AIA) in return for reducing its debt. AIG may also securitize some U.S. life insurance policies and give them to the government to further reduce its debt.
What do you think of this deal?
Closing Bell: Dubai sends jitters throughout the market (S, BBY)
Heinz looking good after the second quarter?
Why isn't Bank of America updating its shareholders on CEO situation?
Reader Comments (Page 1 of 1)
3-02-2009 @ 8:17AM
gerald said...
The money they lost doesn't count the money I'm suing them for in court under Florida's bad faith laws. Aig and the new alias they are operating under 21st Century insurance are also under investigation in two diffrerent states as of last week at my doing for criminal fraud in the way they have been denyoing claims and refusing to pay claims. My attorney assured me we will be getting even with you Aig. You better set asside the $500,000 the minimum you will be owing me in court. I bet the govt has no clue all the claims that you have been not paying and denying that you owe. Get rid of this no good insurer now. The lies run deep at Aig and so do the crimes against its policy holders. I will have the last laugh here AIG.
3-02-2009 @ 12:03PM
LeRoy said...
How can large companies run their business at such huge losses and feel they deserve bailout money? Gas prices went up and now the auto makers and other large businesses are billions of dollars in debt. How did that happen? Screw up and get rewarded is that how it works? I have American General INS, now under AIG, will my insurance still be good if I or my spouse die? If these large companies managed their businesses so poorly that their billions in debt, how can they possibly survive and make a profit and pay back a large bailout.