AIG plans to reduce its debt under a Federal Reserve credit line by $25 billion by handing over stakes in two non-U.S. life insurance units, the insurer said last week. The New York-based company has tapped about $40 billion from the line. AIG has received four bailouts, totaling $182.5 billion, after agreeing in September to turn over a majority stake to the U.S. when the company was overwhelmed by losses on bets tied to the housing market. In addition to a $60 billion credit line, the rescue includes $52.5 billion to buy mortgage-linked assets owned or insured by the company, and an investment of as much as $70 billion. “We believe there is an excellent chance that we can repay the government,” Liddy said. “The government is not prepared to make any adjustments” to the arrangement that turned over majority control to the U.S., he said. “My hope would be that as we make progress in the overall restructuring, that maybe those conversations will bear fruit.”
Liddy’s remarks echo comments he made to Congress last month when he said the company can pay back the credit line and a $40 billion stock investment within five years by selling units or holding stock offerings for businesses. The insurer may need more time if markets worsen, he said then. AIG has disclosed transactions raising about $6.7 billion, striking deals to sell a U.S. auto insurer, an equipment guarantor, its New York headquarters and a Japanese office tower.
