AIG unveils exit plan for bailout

robert_benmosche.gi.top.jpgAIG Chief Executive Robert Benmosche has a plan to pay down his company's debt to U.S. taxpayers. By Aaron Smith and Grace Wong


NEW YORK(CNNMoney.com) -- AIG said Thursday it has reached agreement on a plan that it will end its multi-billion dollar bailout from the federal government and provide for the full repayment to U.S. taxpayers.

The insurer outlined various measures for repaying its debt, including the repayment of $20 billion in senior secured debt owed to the Federal Reserve Bank of New York's credit facility.

After the credit facility is repaid in full, the company said the U.S. Treasury will exchange its $49.1 billion of preferred shares into common AIG shares.

Also, AIG said it will facilitate the "orderly exit" of the Federal Reserve Bank of New York's interest in two special purpose vehicles totaling $26 billion. The insurer said it draw down up to $22 billion through the Troubled Asset Relief Program to purchase these interests from the bank.

AIG took another step towards paying back its government bailout earlier Thursday, announcing an agreement to sell its Japan-based units for $4.8 billion.

The insurer said it is selling its Star Life and AIG Edison Life companies to Newark, N.J.-based Prudential Financial (PRU, Fortune 500). A separate, British company, also called Prudential (PUK), made a previous bid for an Asian life insurance unit was rejected by AIG earlier this year.

AIG's (AIG, Fortune 500) stock rose more than 2% in pre-market trading.

The U.S. government currently owns a 79.8% majority stake in the insurer.

"This is a pivotal milestone as we deliver our long-standing promise to repay taxpayers and we thank the American people for their support," said AIG Chief Executive Robert Benmosche. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,730.11 -27.80 -0.16%
Nasdaq 5,009.21 -3.91 -0.08%
S&P 500 2,076.78 -0.64 -0.03%
Treasuries 2.39 -0.02 -1.03%
Data as of 5:51pm ET
Company Price Change % Change
Bank of America Corp... 17.03 -0.19 -1.10%
Apple Inc 126.44 -0.16 -0.13%
Intel Corp 30.56 0.38 1.24%
Micron Technology In... 19.07 0.29 1.54%
General Electric Co 26.78 0.12 0.45%
Data as of 4:07pm ET
Sponsors

Sections

A federal appeals court judge sent two cases lodged by unpaid interns back to a lower court. More

Entrepreneur Guillaume Gauthereau is on a mission to build a 50 to a 100 acre sanctuary in New York to provide refuge to honey bees. More

One of the most expensive restaurants in New York City will pay $500,000 in restitution to workers for failing to pay some staff their tips. More