AIG to sell American General Finance to Fortress Investment Group
11 Aug 2010
Stricken US insurance and financial services company American International Group (AIG) today agreed to sell 80 per cent of consumer finance unit American General Finance (AGF) to Fortress Investment Group managed funds and affiliates.
AIG did not disclose the financial terms of the transaction.
Founded in 1920, AGF provides loans, retail financing and other credit related products across the US, Puerto Rico, the Virgin Islands, and the UK.
Once the largest insurance company in the US, it was sunk by the US mortgage crisis of 2007, when it was stuck with $450 billion worth credit derivaatives that left it among of the most vulnerable to damage, as mortgage insurers were among the hardest hit by a tightening in the housing market. (See: AIG in free fall after credit rating downgrades)
It was bailed out by US Frederal loans of around $180 billion. To meet the loan repayments it has been divesting business to raise funds.
AGF has over one million customers and 1,100 branches located across the US, Puerto Rico and the Virgin Islands. It has assets of about $20 billion and liabilities of around $18 billion including $17 billion of debt.