AIG repays nearly $4 billion of US government debt

Beleaguered US insurance giant American International Group (AIG) said yesterday that the company has repaid $3.95 billion of government debt to the Federal Reserve Bank of New York (FRBNY) credit facility, in its single largest cash payback of bailout loan so far.

The proceeds raised by AIG's subsidiary International Lease Finance Corporation (ILFC) through its recent $4-billion debt sale has been used to repay the loan.

The action would reduce AIG's outstanding principal balance to approximately $15 billion excluding accumulated interest and fees, the company said in a statement.

The payment also reduces the size of the FRBNY credit line available to AIG from around $34 billion to $30 billion.

AIG president and CEO Robert H. Benmosche said, "This is continuing tangible evidence of AIG's progress in repaying the American taxpayers."

"ILFC has demonstrated today further progress in stabilising its finances and buttressing ILFC's balance sheet," Benmosche further added.