Monday, June 29, 2009


AIG to Pay Back $25 Billion in Debt Through IPOs

Perhaps the poster child for the Wall Street bailout, American International Group Inc. is making an attempt to pay for its over-leveraged sins.

The company has agreed to pay back $25 billion in loans received from the Federal Reserve Bank of New York, by launching an initial public offering for two of its international life insurance businesses. AIG will convert its equity in both American International Assurance Co. [AIA] and American Life Insurance Co. [ALICO] into “special purpose vehicles,” in an attempt to raise capital to pay back its debts, according to a release from the company.

The New York Fed will get $25 billion in preferred interests of the two companies--$9 billion in preferred interests in ALICO, and $16 billion in preferred interests in AIA, which will be listed on an Asian exchange, according to a report in the Wall Street Journal. AIG will still hold the common interests in the two spinoffs...

FoxBusiness: AIG to Pay Back $25 Billion in Debt Through IPOs

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