US Insurer to get further $27bn, according to reports.
See also: AIG posts $24bn Q3 loss & Treasury forces AIG to curb exec compensation
Troubled US giant insurer AIG is reported to have secured a further $27bn (£17bn) in government support after a weekend of talks ahead of releasing third quarter results today (Monday 10 November).
The loan, which takes Federal support to $150bn, is to help it cut its interest repayments and sell more assets.
Just two months ago the Federal Reserve took an almost 80% stake in the insurer. Reports suggest the new deal swaps an $80bn two-year loan for a $60bn five-year loan, slashing interest payments.
The Federal Reserve is also understood to be taking over AIG’s credit swaps and mortgage-backed securities – the worst hit credit crunch assets that are haemorrhaging cash. Under the deal, if the assets do increase in value, the Fed keeps two-thirds of the profits with AIG getting the rest.
AIG is due to announce its third quarter results and 8.30 EST (GMT -5) today, with a live internet broadcast.
