AIG Domestic Life Units Get $37.8 Billion Cash from Federal Reserve
The Federal Reserve Board has authorized the Federal Reserve Bank of New York to borrow securities from certain regulated domestic life insurance subsidiaries of the American International Group (AIG).
Under this program, the New York Fed will borrow up to $37.8 billion in investment-grade, fixed-income securities from AIG in return for cash collateral. These securities were previously lent by AIG’s insurance company subsidiaries to third parties.
AIG shares fell 17 percent to $2.64 in early trading Thursday on the New York Stock Exchange following the news of the latest government assistance, which came only a week after the government loaned it $85 billion.
As expected, drawdowns to date under the existing $85 billion New York Fed loan facility have been used, in part, to settle transactions with counterparties returning these third-party securities to AIG.
This new program will allow AIG to replenish liquidity used in settling those transactions, while providing enhanced credit protection to the New York Fed and U.S. taxpayers in the form of a security interest in these securities, according to officials.
AIG is now in debt to the government for almost $125 billion. AIG has begun the process of selling assets to repay the loans but no deals have yet been finalized.
- EPA Designates PFAS Chemicals as Superfund Hazardous Substances
- Work Safety Group Releases List of ‘Dirty Dozen’ Employers
- Jury Awards $80M to 3 Former Zurich NA Employees for Wrongful Termination
- Florida’s Home Insurance Industry May Be Worse Than Anyone Realizes
- Mother of 8-Year-Old ‘Violently Sucked’ into Houston Hotel Pool Files Wrongful Death Suit
- Poll: Consumers OK with AI in P/C Insurance, but Not So Much for Claims and Underwriting
- Property Restoration Industry: A Culture in Need of Repair?
- CoreLogic Report Probes Evolving Severe Convective Storm Risk Landscape