AIG repays more of $85 billion Fed loan
CHARLOTTE -- The updated figures come as reports circulated Friday that AIG may receive less stringent loans terms.
The Wall Street Journal said Friday that federal officials are considering a possible change in the terms of an $85 billion loan made to AIG in September.
AIG spokesman Joseph Norton declined to comment on the report, but said "AIG continues to work on its plan to find a permanent solution to its liquidity losses, to sell assets so it can repay the Federal Reserve loan with interest and to explore other avenues to help AIG restore its financial health."
Federal Reserve Bank of New York spokesman Andrew Williams also declined to comment.
Reports said an announcement could be made as soon as this weekend or on Monday when AIG announces third-quarter results.
Figures released by the Federal Reserve Thursday showed that as of Wednesday, the government has loaned AIG $81.2 billion under two emergency facilities that were to help the company stave off bankruptcy. That figure was $83.5 billion a week ago.
In September, the Fed said it would provide AIG a two-year, $85 billion loan at an interest rate of about 11.5%. In return, the government received a 79.9% stake in AIG and the ability to remove senior management.
The central bank later said it would loan the company an additional $37.8 billion.
Last week, AIG said it would be able to access up to an additional $20.9 billion under the new commercial-paper-funding-facility program.
In total, the government has put about $144 billion at AIG's disposal.
By using the commercial-paper program from the Fed, AIG has been able to reduce the amount it had borrowed under the original $85 billion line of credit, Norton said.
As of Wednesday, AIG's borrowings under the $85 billion credit facility totaled $61 billion, down from about $65.5 billion a week ago. The total paydown in the past two weeks totals $9.1 billion.
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