AIG closes deal for another $40 billion

The never-ending saga and black hole of cash continues. I’m sure they’re minding their budget though and are no doubt only flying Business Class instead of First Class.

The government on Monday provided new financial assistance to troubled insurance giant American International Group, including pouring $40 billion into the company in return for partial ownership.

The action was announced jointly by the Federal Reserve and the Treasury Department. All told, the moves boost aid to the company to around $150 billion.

The $40 billion infusion comes from the recently enacted $700 billion financial bailout package. The government is buying preferred shares of AIG stock, giving it an ownership stake in the company.

As part of the new arrangement, the Federal Reserve is reducing a $85 billion loan it is had made available to AIG to $60 billion. The Fed also is replacing a separate $37.8 billion loan to the insurance company with a $52 billion aid package.

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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