AIG Mortgage Bond Insuror Gets $4.3 Billion in New Financing from 36 Banks

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EDITOR’S NOTE: This deal was probably easier than it looks. The big question is whether AIG will pursue its claim that the insurance contracts on which it paid were procured by fraud. Neither the “mortgage bonds” nor the “loans” that were “backing” the mortgage bonds were real. Why isn’t AIG getting back that money and giving back almost $200 billion to the U.S. taxpayers?

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American International Group said on Monday that it had signed $4.3 billion worth of credit deals with 36 lenders — in yet another step by the insurer to get off government life support.

In a filing with the Securities and Exchange Commission, A.I.G. disclosed that it had entered into a $1.5 billion credit agreement for three years on Dec. 23 and a $1.5 billion agreement for 364 days. Its subsidiary Chartis will get another $1.3 billion.

“This success is another important vote of confidence by the market in A.I.G.,” the company’s chief executive, Robert Benmosche, said in a statement. “These credit facilities, combined with the debt offering and contingent liquidity facility, demonstrate that A.I.G. has momentum and has made substantial and impressive progress this year.”

The deals come with several contingencies for the insurer, including an obligation to maintain a specific minimum net worth and to limit its total debt. Another condition of the credit: A.I.G. must repay it credit line with the Federal Reserve Bank of New York.

In early December, A.I.G. disclosed in a S.E.C. filing that it had formalized a deal to repay the New York Fed, including some $20 billion of secured debt. The plan also paves the way for Treasury Department to sell its stake in the insurer.

“Today’s announcement is a milestone in the government’s long-stated efforts to exit our investments in private companies as soon as practical while protecting taxpayers,” Tim Massad, acting assistant Treasury secretary for financial stability, said in a statement about the A.I.G. regulatory filing.

In an effort to pay back taxpayers, A.I.G. has moved to sell assets and raise money over the past six months. The insurer penned a $4.3 billion deal in September to divest AIG Star and AIG Edison life insurance companies. The company has also tapped into the public markets, selling $2 billion of debt on Dec. 2.

5 Responses

  1. […] AIG Mortgage Bond Insuror Gets $4.3 Billion in New Financing from …Dec 29, 2010 … Neither the “mortgage bonds” nor the “loans” that were “backing” the mortgage bonds were real. Why isn’t AIG getting back that money and … […]

  2. 4.3 billion worth of credit deals with , 36 leanders,”Neil’ how can we find out who the leanders are.

  3. Neil: “Why isn’t AIG getting back that money and giving back almost $200 billion to the U.S. taxpayers?”

    Is it perhaps because it is “gone”, spent on bonuses and/or ‘invested’ in appreciating foreign currencies?

    .

  4. What makes anybody think that the banks or AIG or our government are telling us the truth. A great deal of this money is phoney money that is made out of thin air by the Federal Reserve. Get rid of the phoney accounting systems in the banks, get rid of the Federal Reserve and give Americans back their homes and their money. http://www.challengingforeclosure.com Sirak@challengingforeclosure.com

  5. We still need to know where every dime of the first money went and where this money is going–we know what somehow this money was used to pay off claims from the banks for the belly up pools. What needs to happen is to make AIG prduce EVERY CLAIM for money for the insured pools to help trace the money. Why is no one asking for this?

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