AIG reportedly near deal on new government bailout

NEW YORK — American International Group Inc. late Sunday was reportedly near a deal for a revised bailout package from the U.S. government that would make borrowing terms easier for the troubled insurer.

A proposed $123 billion bailout package would be replaced with a new $150 billion package, according to the Wall Street Journal.

Details of the arrangement could be announced as early as Monday, when AIG is scheduled to report its third-quarter results, the Journal said. The plan reportedly would replace an $85 billion two-year loan with a $60 billion five-year loan at a lower interest rate.

The government also reportedly would inject $40 billion into AIG in exchange for preferred stock.

AIG representatives were not immediately available for comment.

The government had earmarked $85 billion in September for AIG's rescue. Another $37.8 billion was made available in October.

Comments

[bmwracer]

More money for them?

I guess AIG bigwigs need to fund another one of their five-star "retreats" on the American public's dime.

[iusedtocare]

Excuse me. Why don't you get your facts straight. The event that you reference was Not for AIG executives. There are many, many good hardworking people at this company.

[sparkey]

Yes, it takes a lot of hard working people to steal money from the taxpayers.

[Jazzcomedian]

It's the credit default swaps (CDS) that AIG has insured that's got the Fed and Treasury scared. There are an estimated $62 trillion in CDS around the world, and AIG has insured a significant amount. That's why it's burning through money so fast. If they let AIG default on those CDS obligations life as we know it on this planet is over. We'll all be Zimbabwe. That's why they can't let AIG fail and have to keep ponying up cash. Letting Lehman fail caused the credit freeze, and global market roller coaster and declines. Not to mention forcing four nations to the IMF window due to near insolvency. They underestimated how the market would handle it. I'm sure the Fed and Treasury would like to revisit that decision. If AIG fails with all their global tentacles and insured CDS, what we recently experienced will seem like child's play. We're just barely holding on, and hoping the other shoe doesn't drop.

[23000Days]

The best way in the world to redistribute wealth downward would be to let the CDSs fail, then flood the country with new money at the street level. Much better than throwing the new money down a bottomless hole.

[HamletsMill]

I have thought about this a lot myself. Why not declare all toxic financially radioactive CDS contracts completely null and void and now declared completely illegal. Ban the people that created them from ever working in finance again. Give them the 4 inch thick contracts to burn for heat in 50 gallon drum barrels after they are thrown out of their houses in the Hamptons. There is a sort of precedent where the British declared certain kinds of derivatives illegal in 1992. Does anyone here have in links on articles about how the Lehman CDS settlement was ACTUALLY DONE? How did $455 Billion in CDS exposure get settled for a manageable $6 Billion. I don't care how good the hedge investments were with this stuff to cancel so much out. There is something very fishy going on here. There is something else going on?

[goobaby]

Two Words.....F That. Seriously

[munki]

Transparency and disclosures!!!!
No more after the fact surprise like...
luxurious retreats!!!

[Dianekkdi]

I think it's time to answer the question: Just exactly who isAMERICAN INTERNATIONAL GROUP, AIG?

Do you know?

Right now, all I really know is that it's a big black hole that eats dollars by the billions.

I need more information.

Don't you?

Let's research it. Where's the money going? Who's getting it? Who are these people? Can I have some too? No 300 dollar checks either...I want zeros....

No, really, seriously...what and who is this company: American International Group?

[Dianekkdi]

http://ir.aigcorporate.com/phoenix.zhtml?c=76115&p=irol-govboard

One thing is certain: The perp line depicted above needs to be at least fired and investigated for possible prosecution.. No benefits, no retirement, maybe the unemployment line--they will after all have been fired.. Let them get the max payment allowed from there.

[Carolab]

Hank Greenberg - read about him and 9 1 1 and the insurance on the towers and Greenberg Traurig (Abramoff) and the connections to the Carlyle Group.

[aubrey8]

just stringing us along...oh it's just 85 million....6 weeks later it's 150 mil.

Come on these people have been stealing all they could the last few years and their plan all along was to have Uncle Sam bail them out. the same people they stole the money from.

Needs to be a whole lot of people going to jail for a long, long time. The biggest heist of all time.

[AmazedOne]

Is that the money for the New Years bash (and bonus)?

[IndependenceDame]

$85B in September, then $37.8B afterwards through the Federal Reserve giving it access to an additional "lending facility" (?), but has only drawn down about $81B total. Now AIG is renegotiating to get more money, for a longer term, at a cheaper interest rate and granting the U.S. a 40% stake in preferred stock. AIG can't find $100M out of the first $81B. I don't trust that the stock will be worth the paper it's written on or the bytes used in an electronic transfer. Once more I wrote my Senator and asked that he stop the insanity and vote no. Wish he'd listen to someone other than Paulson and AIG.

http://money.cnn.com/2008/11/09/news/companies/aig/?postversion=2008110921

[veggiequeenmo]

wtf????????????? what about the homeowners and citizens? where's our share of the bailout? my kids cost a lot to feed! can obama take over early - PLEASE!!!!!

[TrooAmerican]

OK......................
Werent we just told a few days ago that AIG had Completely Burned through the entire pile of cash they were just given a few weeks ago?

And werent we just told that while they were burning through our cash, their Execs were marking off huge bonuses for themselves and their cronies?
And werent we just told that they sent a huge quantity of Sales managers for a vacation with spas, golf outings, expensive dinners, all paid for by us taxpayers?
And werent we just told that AIG owed 20Billion to Goldman Sachs and thats why they Pushed their DUEL-EMPLOYED Crony Pat Paulson, the Treasury secretary to Totally and completely bail AIG out and give them Oral as well?
I coulda sworn we were told thats what happened.

[JiminNC]

Hell, I missed it going from 85 billion to 123 billion ... this is absurd.

[mjb5406]

AIG also sounds like Oliver Twist... "More, please"

[JiminNC]

MORE?

[aaronl37]

Bailout, bailout, bailout first with the stimulus check, then Wall Street, and possibly American car companies and us taxpayers again? Clearly this a direct cause of Bush. Even George knows that. Can someone please help me understand why extreme right wing Christians will vote for a candidate solely based on the "right to life" issue and disregard issues that will directly affect them? Abortions don't effect peoples 401K and i am seeing people vote for a man convicted of seven felony's and probably will serve a little prison time. But the Pro Life trumps everything? Are they serious? These people would vote for Snoop Dog for President if he said he was pro life and his rival were... uh... Barack Obama.

[mjb5406]

What happened to all of the so-called "oversight" that was supposed to be in place? Can we replace Paulson NOW? I guess the lame-duck administration wants to squeeze every penny out of that $700 billion package before they leave office.

[aconir]

guess they need a few more spa treatments

[FogBelter]

Until we know the extent of exposure in CDS that AIG has none of the current numbers associated with a bailout have much value. There is more we don't know about the credit crisis than we do know.