☰ ˟
Agent Appointment  Call Now / 713-227-7283
Logo
  • Home
  • Get a Quote
  • What We Offer
    • Automobile
    • Bonds
    • Business & Commercial
    • Business Owners Policy (BOP)
    • Commercial Auto
    • Dental
    • Earthquake
    • Farm
    • Flood
    • General Liability
    • Health
    • Homeowners
    • Life
    • Limousine
    • Motorcycle
    • Recreational Vehicle
    • Renters
    • Trucking
    • Vision
    • Watercraft & Boat
    • Windstorm
    • Workers Compensation
  • Agents
    • Agent Appointment
    • How We Can Help
    • Carrier Appointments
    • Online Payment
    • Get a Quote
  • Policy Service
    • Customer Service Forms
    • Make a Payment
    • Claims
  • Resources
    • View our Blog
    • Secure File Area
    • Refer a Friend
    • Important Links
    • Calculators
    • Free Reports
    • Insurance Glossary
    • FAQs
    • Join Our Newsletter
  • About Us
    • About Reliable Insurance Managers Inc
    • Our Locations
    • Employment Opportunities
    • Employee Directory
    • Customer Testimonials
    • Privacy Policy
  • Contact

What can we help you cover!
Bookmark and Share
Home > Blog > AIG repaying nearly $4 billion in federal loans
MONDAY, AUGUST 23, 2010

AIG repaying nearly $4 billion in federal loans

In its single biggest repayment of bailout loans so far, American International Group Inc. said Monday it is paying back nearly $4 billion in taxpayer aid with proceeds from a recent debt sale.

The insurer's aircraft leasing company, International Lease Finance Corp., completed the sale of $4.4 billion in debt. AIG will use more than $3.9 billion of the proceeds to repay the Federal Reserve Bank of New York, trimming the balance on its credit line with the Fed to about $15 billion. Adding interest, the total is about $21 billion.

The emergency credit line was part of a $182 billion federal bailout package that New York-based AIG received during the financial crisis to avoid collapse. AIG has been selling off assets to pay back the aid.

"This is continuing tangible evidence of AIG's progress in repaying the American taxpayers," said Robert Benmosche, AIG President and CEO. "AIG is getting stronger every day. We still have more work to do, but we will finish the job and make sure we repay the American taxpayers."

As of June 30, excluding the new payment, AIG said its outstanding balance owed to the government stood at about $101 billion. The total includes debt as well as preferred shares of stock in AIG held by the Treasury Department.

Los Angeles-based ILFC leases one of the world's biggest commercial jet fleets. It struggled earlier this year to pay off its loans, and had to draw the $3.9 billion from AIG to pay back some of its debt. AIG had tried to find a buyer for the unit, but any sale seems off the table for now as ILFC has found healthy demand for recent bond offerings which will help it meet some deadlines for paying back loans.

The repayment will release about $10 billion of collateral that ILFC had pledged to the Fed under the credit agreement. With the recent debt sales and other notes issues, the aircraft unit has boosted its total liquidity -- assets that can quickly be converted to cash -- to more than $12.5 billion over the last five months.

The offerings "are a direct reflection of our company's viability and future prospects as a leader in leasing aircraft to the world's airlines," said Henri Courpron, ILFC's CEO. He noted that the company has more than $13 billion in aircraft orders.

Separately, AIG said it will book a pretax charge of about $650 million against its earnings due to the repayment.

AIG shares dipped 13 cents to $35.04. The stock has traded in a 52-week range of $21.54 to $55.90.

In June, the Congressional Oversight Panel said in a report that it was still unclear whether U.S. taxpayers will ever fully recoup the full $182 billion they plowed into AIG.

Regulators feared AIG's collapse would pose a threat to the whole U.S. financial system, in part because of AIG's dealings in financial contracts called credit default swaps. The swaps that AIG sold were insurance-like guarantees on mortgage securities that wound up forcing AIG to pay out billions of dollars after the housing market went bust.

Earlier this month, AIG reported a $538 million second-quarter loss due to charges related to selling assets to repay the bailout money. Among the charges were $3.42 billion related to the sales of AIG's American Life Insurance Co. unit, or Alico, and its Nan Shan Life Insurance Co.

Posted 8:10 PM

Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2020
  • 2019
  • 2018
  • 2017
  • 2015
  • 2014
  • 2013
  • 2012
  • 2011
  • 2010
  • 2009
  • 2008

  • insurance(133)
  • texas(93)
  • houston(45)
  • to(44)
  • tips(39)
  • katy(39)
  • safety(29)
  • in(23)
  • for(20)
  • auto insurance(19)
  • insurancepro(19)
  • on(18)
  • auto(15)
  • from(15)
  • health(15)
  • policy(13)
  • home insurance(13)
  • business insurance(13)
  • of(12)
  • savings(11)
  • a(11)
  • agency(10)
  • coverage(10)
  • how(10)
  • car(10)
  • houston auto insurance(9)
  • complaints(9)
  • quoting(8)
  • obama(8)
  • texas department of insurance(8)
  • new(8)
  • reports(7)
  • up(7)
  • house(7)
  • homeowners(7)
  • website(7)
  • state(6)
  • more(6)
  • life insurance(6)
  • the(6)
  • what(6)
  • healthcare(6)
  • after(6)
  • renters insurance(6)
  • your(6)
  • tx(6)
  • ways(6)
  • senate(5)
  • work(5)
  • houston car insurance(5)

View Mobile Version

Our Customer Feedback

Read More

Our latest blogs

  • Carrier
  • Carrier
  • Carrier
  • Carrier
  • Carrier
Reliable Insurance Managers, Inc.
Call:
713-227-7283
We work for you. As a one-stop agency, we continually search for companies that offer great rates and that are easy to work with. Our staff of proven professionals is committed to providing you with the type of exceptional service you deserve and expect.
We're here for you
Home Page/ About Us/ Contact Us/ Our Blog/ Latest News/ Join Our Newsletter/ Refer A Friend
Quick Help Links
Quote Forms/ Service Forms/ File a Claim/ Make a Payment/ Insurance Glossary/ FAQs
Icon Icon
Icon Icon Icon
Social Icon Social Icon Social Icon Social Icon Social Icon Social Icon
© Copyright. All rights reserved. Powered by Insurance Website Builder