As sales where the automaker expected sell 9This requires that give meaning to the crisisEurope is sometimes difficult to speak with one voiceA litigant may not benefit from its contradictionsCalifornians of the Senate and the House are the key committees All are capable of passing alliances of circumstance with the other sideWe bet that London does that emerge fine wordsHowever the rural France fears to change pricesThe minority shareholder to win visibility I was loaded but the elevator was blockedFederal authorities have opted for an "orderly dismantling" of the first U.S. insurer. Facing the historical magnitude of his losses (99.3 billion in 2008), the Treasury and Federal Reserve (Fed) yesterday announced an overhaul of the bailout of AIG through its comprehensive restructuring. For the fourth time in six months, Treasury will fly to the rescue of the giant by granting a new facility"capital" of $ 30 billion in preferred shares, in addition to the $ 150 billion of federal aid already granted to AIG since September.
"In view of the systemic risk that continues to ask AIG and fragility markets today, the potential cost to the economy and the taxpayer to the Government's inaction would be extremely high", emphasize the Treasury and the Fed. In support of their initiative, U.S. authorities recall such as AIG provide insurance coverage to more than 100,000 companies, municipalities and organizations of retirement, or more than 100 million Americans potentially affected by its failure. That is why "an orderly restructuring is essential to ensure reimbursement by AIG of the support that he has already received the American taxpayer and to preserve financial stability," added the Treasury and the Fed.
Ever the slogan "too big to fail" (too big to fail) was also relevant. Designed on the model already used for Citigroup, the new AIG rescue plan aims to give free rein to the Federal Government for the complete restructuring of the insurer. As expected for several days to prepare the ground for intervention by the authorities, the net loss of AIG in the last quarter, if student at the impressive figure of $ 61.7 billion, or an absolute record in the history of the United States. Throughout the fiscal year 2008, the net loss of AIG stands at 99.3 billion, against a positive outcome of 6.2 billion in 2007.
Credit facility
In addition to the 30 billion of additional aid, the new plan provides "separate non-core activities" of the Group and a complete revision of the terms of the $ 60 billion emergency loan from the Fed in September, in exchange for the resumption of 80 of the shares of AIG by Treasury. The amount of this credit facility will be significantly reduced in exchange for (valued at $ 26 billion) participation in two ad hoc entities specially created to hold the two life insurance subsidiaries: American Life Insurance Company (Alico) and American International Assurance Company (AIA)
). "AIG will retain control of Alico and AIA, but the New York Fed will get certain rights of governance to protect its interests," said Treasury. The commercial insurance industry will be separate.
In addition, the New York Fed was authorized to grant new loans amounting to $ 8.5 billion to special vehicles (SPV) created by subsidiaries of AIG life insurance, repayable through the securitization of the cash flow of existing life insurance policies. Finally, the plan provides for the conversion of the $ 40 billion of preferential shares held by the Treasury in "new titles preferential to the revised terms, somewhat resembling common shares", to improve the quality of the capital of AIG and its ability to leverage. These new 77.9 per cent of its capital shares will be issued tomorrow by AIG.
According to the CEO, Ed Liddy, this new plan should enable the insurer to pay back the money for the taxpayer "to the last penny". But it also aims to avoid a new deterioration of AIG financial note by credit rating agencies which would have disastrous consequences on its deadlines.
