AIG may start repayments
The company owes billions to taxpayers. If a sale goes through, AIG might start repaying some of that debt.
After bailing out AIG to the tune of $182 billion, the government may finally get a small bit of return, The Wall Street Journal reports. That's because AIG may soon seal a deal to sell one of its big life insurance divisions to MetLife (MET).
Sources tell the Journal that the unit could sell for as much as $15 billion, of which $9 billion would be returned directly to the Federal Reserve Bank of New York. AIG would get the rest and could use the money to further pay down its debt to taxpayers.
OK, so it's a drop in the bucket compared with what AIG owes. But at least the company is starting to pay back something. And if AIG completes a separate public offering of another division, called American International Assurance, it could bring its repayment total to $45 billion. At least that's what administration officials are saying.
"This could be that big first step so the government can show progress on AIG. Monetizing this is a key first step," an insider told the Journal.
It's about time. Here's the breakdown of the AIG bailout, according to the Journal:
- $47 billion in loans and equity interests held by the Fed.
- $45 billion in preferred shares held by the Treasury.
- $33 billion in government funds to buy distressed mortgages.
- $60 billion being held for AIG to draw upon.
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