AIG plans IPO of arms to repay $25 billion debt

26 Jun 2009

1

The US government has agreed to accept $25 billion of preferred stock in two American International Group Inc (AIG) arms, the company said on Thursday.

The company will place its subsidiaries, American International Assurance Co. (AIA) and American Life Insurance Co. (ALICO) for initial public offerings (IPOs).

The deal, which is expected to close in the second half of 2009, will cut AIG's debt obligation under a Federal Reserve Bank of New York credit facility to $15 billion.

In a bid to prepare the franchises for the IPOs, AIG said it has entered into a deal with the Federal Reserve that will hand over equity to AIA and ALICO into different special purpose vehicles (SPVs).

According to a press release, AIG will get preferred and common interests in the SPVs, while the US central bank will get preferred interests of $16 billion in the AIA special purpose vehicle and $9 billion in the ALICO special purpose vehicle.

AIG will benefit if the IPOs yield more than the preferred interests.

Business History Videos

History of hovercraft Part 3 | Industry study | Business History

History of hovercraft Part 3...

Today I shall talk a bit more about the military plans for ...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of hovercraft Part 2 | Industry study | Business History

History of hovercraft Part 2...

In this episode of our history of hovercraft, we shall exam...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Hovercraft Part 1 | Industry study | Business History

History of Hovercraft Part 1...

If you’ve been a James Bond movie fan, you may recall seein...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Trams in India | Industry study | Business History

History of Trams in India | ...

The video I am presenting to you is based on a script writt...

By Aniket Gupta | Presenter: Sheetal Gaikwad

view more
View details about the software product Informachine News Trackers