Report title: NY Fed to Swap $25 Billion of AIG Parent Debt for Preferred Interests in International Life Operations
from Moody's Global Credit Research
4 page (1998 word) report published Jun 28, 2009

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...American International Group, Inc. (AIG ¡ senior unsecured debt rated A3, negative outlook) and the Federal Reserve Bank of New York (NY Fed) have agreed to terms on debt-for-preferred swaps involving AIG's main international life insurance businesses ¡ American International Assurance Company, Ltd. (AIA) and American Life Insurance Company (ALICO). These transactions, expected to close in the second half of 2009, will allow AIG to repay $25 billion of senior secured borrowings from the NY Fed and will pave the way for initial public offerings (IPOs) by AIA and ALICO, subject to market conditions. The arrangement between AIG and the NY Fed reflects the difficulty in finding strategic buyers for AIG's largest businesses in the current weak economy. It also demonstrates the willingness of the NY Fed to provide support and serve as an interim funding source. We observe that, over time, the various support initiatives taken by the US government (see chart below) have shifted away from the secured...

Report Type: Issuer Comment
Issuer: American International Group, Inc.
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