Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Search for Jobs

Index Last Change % Change
Dow 19,792.67 -34.10 -0.17%
Nasdaq 5,541.32 2.59 0.05%
S&P 500 2,268.13 0.24 0.01%
Treasuries 2.38 0.05 2.28%
Data as of 1:38pm ET
Company Price Change % Change
Bank of America Corp... 22.38 0.33 1.51%
Citigroup Inc 57.55 -0.83 -1.42%
Chesapeake Energy Co... 6.95 -0.06 -0.86%
Ford Motor Co 12.34 -0.07 -0.60%
Reynolds American In... 57.96 0.28 0.49%
Data as of 1:23pm ET
Sponsors

Sections

2,000 GM workers are losing their job on January 20, 2017, the day Donald Trump takes office. Many of these workers in Ohio and Michigan voted for Trump. They hope he'll save their jobs. More

Customers in San Francisco and Washington, D.C. will soon get food delivered in the ground robots. More

Millennials should start thinking about investing for their future now, because time is the one thing they have on their side. More