The struggling insurance giant American International Group said on Monday that it had signed credit lines worth $4.3 billion with 36 lenders — in yet another step by the company to get off government life support.
In a filing with the Securities and Exchange Commission, AIG disclosed that it had entered into a $1.5 billion credit agreement for three years and a $1.5 billion agreement for 364 days. Its subsidiary Chartis will get an additional $1.3 billion.
”This success is another important vote of confidence by the market in AIG,” the company’s chief executive, Robert H. Benmosche, said in a statement. “These credit facilities, combined with the debt offering and contingent liquidity facility, demonstrate that AIG has momentum and has made substantial and impressive progress this year.”
The deals come with several contingencies, including an obligation to maintain a specific minimum net worth and to limit its total debt. AIG must also repay its credit line with the Federal Reserve Bank of New York.
In early December, AIG disclosed that it had formalized a deal to repay the New York Fed, including $20 billion in secured debt. The plan also paves the way for the Treasury Department to sell its stake in the insurer.
In an effort to pay back taxpayers, AIG has moved to sell assets and raise money in the last six months. The insurer agreed in September to a more than $4 billion deal to sell two units, the AIG Star Life Insurance Co. and the AIG Edison Life Insurance Co. It also tapped into the public markets, selling $2 billion of debt on Dec. 2.
Source : Post Bulletin
