A portion of the emergency loans that the Federal Reserve gave American International Group has been repaid. It wasn’t the bulk of the debt AIG held, but it is a start. AIG sent the Federal Reserve about $4 billion. The company still owes about $97 billion, and in case of emergency, AIG has the option of borrowing about another $30 billion. The company just sold off most of the finance wing. The group is battling to get itself out of debt and back into the black.
AIG wires big payment to the Fed
According to Forbes, the Federal Reserve has recently received a big payment of $4 billion from AIG. AIG was lent almost $182 billion in emergency loans, when the company nearly sank in the midst of the financial crisis. AIG has a credit line of $30 billion in cash from the Fed if needed. For the first time since 2008, AIG is less than $100 billion in debt to the taxpayers. There is a three-year window on the $30 billion the Fed is holding for AIG, just in case it’s needed.
Share sales, sea shells by the sea shore
AIG sold a large amount of shares for the finance wing of the company. An 80 percent stake of the finance wing of AIG was sold altogether. The price was $130 million, according to Forbes. Fortress Investment Group LLC got the shares. AIG got load of quick cash for the shares, but it had to come up with the rest of the cash on its own. Every little bit helps.
Things looking up for AIG
Better days may be on the horizon for AIG. The company had to borrow money to keep its doors open. A lot of it. The bonuses that came out of the taxpayers’ pockets after AIG got the huge government bailout did not sit well with the public at all. AIG is making payments on the debt. So perhaps it’s headed back to being on track.
Additional information at these websites
Wall Street Journal: http://wallstreet.blogs.fortune.cnn.com/2010/08/23/aig-trims-bailout-tab-to-97-billion/
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