AIG
Part Of Continuing Effort To Reduce Investment Portfolio And Risk
NEW YORK–(BUSINESS WIRE)–AIG Financial Products Corp. (AIGFP), an AIG company (AIG), reported today that it has closed the sale of its interests in two transactions and related commodity hedges from its energy and infrastructure book of business for total net proceeds of $60.5 million. The purchaser was not disclosed.The two transactions, known as volumetric production payment (VPP) transactions, comprise limited-term overriding royalty interests entitling the VPP owner to a priority allocation of a fixed monthly production of oil and natural gas from designated producing reserves located in Texas, Louisiana and Mississippi.
The sale of these interests follows AIGFP’s January agreement to sell its commodity index business.
“These successful asset dispositions provide further evidence of the progress we are making in reducing AIGFP’s investment portfolio and overall risk profile,” said Gerry Pasciucco, AIGFP Interim Chief Operating Officer. As previously disclosed, AIGFP began the process of unwinding certain of its businesses and portfolios late last year.
American International Group, Inc. (”AIG”), a world leader in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG’s common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo.
Contact:
AIG
Communications:
Nick Ashooh, 212-770-3523
Nick.Ashooh@aig.com
or
Investor Relations:
Teri Watson, 212-770-7074
Teri.Watson@aig.com
Source: AIG Financial Products Corp.
Tags: AIG, Steve Wevodau AIG, Steven Wevodau AIG
LONDON (Reuters) - American International Group Inc (AIG.N) has kicked off the sale of its Asian life assurance unit in the hope of raising up to $20 billion to help repay a U.S. government loan, the Financial Times reported on Thursday.
The U.S. insurer sent a sales memorandum for American International Assurance (AIA) to a group of selected potential bidders, the newspaper quoted “people close to the situation” as saying.
AIG declined comment on the report.
The Financial Times said AIA is regarded as a jewel in AIG’s crown. It has 20 million policyholders in 13 countries and last year made an aggregate operating profit of about $2 billion.
Analysts estimate the sale of a minority stake could fetch up to $20 billion, it said.
The newspaper said AIG had sought bids for 49 percent of AIA, but would be willing to look at offers for the entire unit. AIG could also opt for a full listing of the division if it does not achieve a high enough price, the report said.
Prospective bidders include China Life (601628.SS), HSBC (HSBA.L) (0005.HK), British insurer Prudential Plc (PRU.L) and U.S. life insurer Prudential Financial Inc (PRU.N), the report said.
Canada’s Manulife Financial (MFC.TO) and Germany’s Allianz (ALVG.DE) have also requested information, it added.
First-round bids are due toward the end of February, it said.
AIG, once the world’s biggest insurer by market value, averted bankruptcy in September with an $85 billion federal government bailout. The rescue later swelled to about $152 billion.
AIG has said it plans to sell everything except its U.S. property and casualty business, foreign general insurance, and an ownership interest in some foreign life operations.
(Reporting by Adrian Croft; Editing by Kim Coghill)
© Thomson Reuters 2009 All rights reserved
Tags: AIG, American International Group Inc., Steve Wevodau American International Group Inc., Steven Wevodau American International Group Inc.
By Haig Simonian in Zurich and Javier Blas in London
Published: January 19 2009 08:12 | Last updated: January 19 2009 08:12
UBS on Monday announced that it would buy the commodity index business of AIG, the struggling US insurer, after it spent the past two months divesting non-core commodities activities.
The Swiss banking group said it would pay $15m to AIG Financial Products for the business, including rights to the popular DJ-AIG commodity index. The index is one of the two leading commodity indices of its kind, after the S&P GSCI, and is popular among passive investors, such as pension funds, who bet on rising commodity prices.
Although the initial sum is modest, UBS said it could make additional payments of up to $135m on the purchase over the following 18 months, based on future profits of the activities being acquired.
Commodity investments linked to the DJ-AIG index amount to about $10bn-$20bn, according to industry estimates and bankers on Monday said that AIG was a counterparty for a “significant amount” of that sum.
The reputation of the index suffered last year after AIG’s financial problems became clear.
ETF Securities, the London-based issuer of popular commodity exchange traded funds, ran into problems last year after several market-makers of its funds stopped trading them amid concerns about AIG, which was ETF’s counterparty for about $2bn in some of its DJ-AIG commodity products. The issues were later resolved.
UBS’s purchase of the AIG business would likely alleviate some concerns about the DJ-AIG index and commodities investments in which AIG was a counterparty, bankers said.
AIG’s commodity index business is composed of a platform of commodity index swap products and funded notes based on the benchmark DJ-AIG commodity Index. UBS said the acquired products were highly complementary to its own UBS-Bloomberg Constant Maturity commodity indices.
The purchase comes just after last week’s sale by UBS of its remaining energy, power and metals trading activities to Barclays Capital and the disposal in December to JP Morgan of its Canadian energy business, as well as its London-based global agricultural commodities trading activities.
However, UBS said at the time that it would retain all its precious metals trading activities, where the bank is a powerhouse, as well as its substantial interests in trading commodity indices, which are being expanded by Monday’s deal.
The purchase involves AIG’s trading book and its information technology platform, but no staff, although some individuals may choose to move to UBS at a later stage. The deal is expected to close by May.
Bankers familiar with UBS’ commodities operations said that its commodity index unit was the most profitable of the whole business.
Copyright The Financial Times Limited 2009
Tags: AIG, Steve Wevodau UBS, Steven Wevodau UBS, UBS
Calling Bank of Montreal’s (BMO) C$375-million cash purchase of AIG’s Canadian insurance business “a bit of a steal,” Dundee Securities analyst John Aiken highlighted the fact that management’s calculated price to book was under 1.1 times. That compares to an average price to book multiple of 1.3x for Canada’s four publicly traded insurers.
More importantly given the current environment, however, is the fact that the acquisition of AIG Life of Canada will only have a modest impact on BMO’s capital ratios, Mr. Aiken told clients. The bank’s management anticipates a less than 15 point decline in its Tier 1 ratio. On a pro forma basis including recent capital issues and changes in risk-weighted assets, the analyst said BMO’s Tier 1 capital is above 10.2%, “still above the market’s apparently mandated 10% minimum threshold.”
Mr. Aiken said:
We view the acquisition favourably as it will benefit BMO by diversifying its revenues, gaining access to additional customers and add to earnings. However, this is not a transformational acquisition but does put the bank in good stead if the Canadian Bankers Association can lift the restriction of branch sales of insurance at some future point.
Nor does it change the analyst’s position on BMO, which he said has been leading the charge in credit deterioration among the Big 6 banks so far in the current downturn. So while this deal may help explain why BMO issued common equity in December, Mr. Aiken said it still does not justify the bank issuing shares below book value. He continues to rate BMO at “neutral” with a C$28 price target.
Desjardins Securities analyst Michael Goldberg notes that bank investments in insurance subsidiaries are not consolidated under Basel II rules. However, those rules will change in 2011 when 50% of an investment would be deducted from Tier 1 capital, which he said would produce a further 10 basis point reduction.
“BMO’s intent is to become a one-stop shop for its clients, allowing it to expand its insurance and wealth management offerings,” Mr. Goldberg said in a research note.
He views the acquisition as immaterial to near-term earnings but positive for optics. “For BMO, optics are relatively more important as its uncertain outlook is reflected in the stock’s 8.5% yield,” the analyst said. Nonetheless, he thinks the near-term impact will be positive, as optics should outweigh the small near-term fundamental impact. Mr. Goldberg rates BMO at “hold” with a C$44.50 price target.
He also believes that markdowns and the losses incurred aside, earnings in the Canadian banks are prolific. “The question remains: how large are the holes that are to be filled.”
RBC Capital Markets analyst Andre-Philippe Hardy noted that AIG’s life insurance business is small with earnings of C$48-million in 2009 and a loss of C$17-million in the last 12 months. This compared to BMO’s annual earnings of more than C$2-billion.
He told clients:
AIG’s range of individual life and annuity products allows BMO to broaden its range of insurance products, which has primarily been credit life and disability insurance, but the small scale will not have a large impact on the growth outlook.
Since Canadian banks cannot sell life insurance in their branches nor share databases with their life insurance subsidiaries, revenue synergies will be limited, Mr. Hardy said. However, BMO intends to offer insurance products as an extension of existing wealth management offering and can sell through its brokerage channel, he added.
RBC maintained its “underperform” rating on BMO. It views the bank’s stronger capital position positively but believes the bank has more exposure to “potentially problematic off-balance sheet assets” and to U.S. lending.
Tags: AIG, Bank of Montreal, Steve Wevodau AIG, Steve Wevodau Bank of Montreal, Steven Wevodau AIG, Steven Wevodau Bank of Montreal
The news is out about AIG’s (AIG) Canadian Life Insurance business, and despite the rumors on Bloomberg, BMO Financial Group (BMO) wound up as the winning bidder.
I was in a TV studio in mid-December, and one of folks sitting beside me asked me what I thought would “happen” with the BMO dividend. The premise of his question was understandable: with a 9% handle, won’t BMO management have to cut the dividend? Isn’t that what the market is telling us?
I suggested that he separate the actual implied yield from what is most likely to happen. The market might be pounding both the Bank of Montreal and the Bank of Nova Scotia (BNS) for a variety of reasons, but the fact that the dividend at BMO had hit 9% as a result, was an afterthought - if any PMs were thinking about it, at all. If BMO had to cut the dividend, it would be due to future unforeseen financial problems, not the simple fact that the stock was at $30 and the implied yield was 9%.
A short time later, BMO raised $1 billion of equity at $30, which confirmed that 1), the market hadn’t given up hope on the business, and 2), that BMO management must have known that selling stock, only to cut the dividend a few quarters later, would potentially be a potentially career limiting move, and were comfortable with where it stood.
Two more weeks have passed, and BMO is spending $375MM of that $1 billion on an important new business thrust. This is not the act of an institution, which is worried about free cash flow, or its ability to continue to pay the $2.80 dividend (now yielding 8.5%).
That’s why it is in the Decade of Daddy Mirror Fund.
Disclosure : I own BMO.
Tags: AIG, BMO Financial Group, Steve Wevodau AIG, Steve Wevodau BMO Financial Group, Steven Wevodau AIG, Steven Wevodau BMO Financial Group
By Leah SchnurrNEW YORK (Reuters) - Stock index futures pointed to a mixed open on Wednesday, which will bring to a close one of Wall Street’s worst years, but not before what is expected to be more bleak data on the labor market.
The Federal Reserve on Tuesday pushed forward with its effort to drive down mortgage costs, setting a target of buying $500 billion in mortgage-backed securities by mid-2009.
The move could bolster optimism as investors have been heartened by signs that the Fed that it is fighting aggressively to stave off the recession, including dropping interest rates to near zero.
“Things haven’t improved but at least the Fed has stopped things from appreciably worsening,” said Barry Ritholtz, chief market strategist at Fusion IQ in New York.
“Clearly most investors this year were not prepared for what happened and I think there’s a sigh of relief from those that were blindsided that the year is finally over.”
S&P 500 futures rose 3.10 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures climbed 12 points, while Nasdaq 100 futures were off 0.50 points.
The broad S&P 500 looks set to end 2008 down about 40 percent for the year, though it has recovered almost 18 percent since hitting an 11-year low on November 20.
Markets around the world have been pummeled as the collapse of the U.S. housing market evolved into a global credit crunch and economic slowdown infecting all sectors from financials to automakers to retailers.
Among the U.S. casualties include the bankruptcy, acquisition or government takeover of such household names as Bear Stearns, American International Group (NYSE:AIG - News), Washington Mutual, Merrill Lynch and Lehman Brothers.
AIG, which was rescued by the government soon after the collapse of Lehman, is prepared to ask the Federal Reserve to relax rules on its more than $60 billion disposals program to allow bidders to use a greater proportion of shares to pay for its assets, the Financial Times reported.
On the housing front, demand for U.S. mortgage applications was unchanged during the Christmas holiday week, holding the highest levels in more than five years with loan rates near record lows, an industry group said on Wednesday.
Bernard Madoff, alleged to have run a decades-long $50 billion Ponzi scheme, faces a Wednesday deadline to tell regulators how much he is worth and where his money and other assets are.
The Madoff scandal, which came to light earlier this month, has added to already negative sentiment in the markets. Scores of wealthy people, banks, universities and charities around the world say they are victims, but so far the exact amount of money is not known in what could be the largest fraud in Wall Street history.
On the economic front, weekly initial jobless claims are expected later in the morning, a day early due to the New Year’s holiday on Thursday.
On Tuesday, stocks climbed after the government expanded its bailout of the auto industry, encouraging hopes policy-makers will continue to take steps to minimize the severity of the year-long recession.
(Editing by Tom Hals)
Tags: AIG, Bernard Madoff, Lehman Brothers, Madoff scandal, Merrill Lynch, Steve Wevodau AIG, Steve Wevodau Washington Mutual, Steven Wevodau AIG, Steven Wevodau Washington Mutual, Washington Mutual
POSTED BY STEVEN S. WEVODAU
(Reuters) - American International Group (NYSE:
AIG -
News), is prepared to ask the U.S. Federal Reserve to relax rules on its $60 billion-plus disposals program to allow bidders to use a greater proportion of shares to pay for its assets, the Financial Times said.AIG was looking at installment payments and other flexible options to make it easier for potential buyers to bid for assets and increase its chances of surviving as an independent company, the paper said, citing people close to the situation.
The moves, being considered by AIG’s management, are aimed at boosting competition for the disposals and countering the perception that the company will be forced to sell units at bargain prices to repay the government aid, the paper said.
AIG has several planned asset sales to raise funds to repay a $150 billion U.S. government bailout.
Under the current deal with the Fed, AIG can sell assets only to bidders paying at least 90 per cent of the price in cash, the paper said.
This provision is designed to ensure that AIG has enough cash to pay both the interest and the principal on a five-year $60 billion government loan as well as $4 billion a year in interest on $40 billion of preferred shares owned by the authorities, according to the paper.
AIG is anxious not to close doors to potential buyers at a time when cash is at a premium and swathes of the capital markets are frozen, the paper said.
The paper reported that no discussion on this issue had yet taken place with the Fed but added that, as AIG’s disposals program continued, the company would entertain bids in cash and shares and take them to regulators for approval.
AIG could not be reached immediately for comment.
(Reporting by Ajay Kamalakaran in Bangalore; Editing by David Cowell)
Tags: AIG, M&A Insurance News, Steve Wevodau M&A Insurance News, Steven Wevodau M&A Insurance News
POSTED BY STEVEN WEVODAU
In our M&A Roundup for the week ended Dec. 28, the year ends with only 21 transactions being signed, garnering a mere $1.1 billion.
Roy Harris, CFO.com | US
December 29, 2008
Dealmaking continued to dwindle as 2008 neared its last days, with only American International Group’s $742-million sale of its Hartford Steam Boiler holding company to Germany’s Muenchener Rueckversicherung Gesellschaft Aktiengesellschaft topping the $300-million mark.
The 21 deals done during the week ended Sunday totaled only $1.1 billion, in terms of the value to North American companies.
There was plenty of worry concerning one huge deal potentially coming undone — Dow Chemical’s $15.3-billion purchase of coatings and electronic products maker Rohm & Haas Co. It was said to depend on a $17.4-billion petrochemical joint venture between Dow and Kuwait, which Kuwait now has cancelled. During the day, however, reports circulated that because the Rohm & Haas transaction is fully financed by a one-year bridge loan and convertible preferred investments by billionaire Warren Buffett’s Berkshire Hathaway and the Kuwait Investment Authority, the Dow-Rohm transaction still might be completed.
Another undone deal — of another sort — weighed on the stock market: billionaire investor Kirk Kerkorian’s reported sell-off of the rest of his Ford Motor holding, a 133.5-million-share transaction that Kerkorian had suggested in recent months would occur. That represented about 6.09 percent of the troubled carmaker’s shares.
Among smaller deals that were done last week, there was some interesting defense-industry consolidation. Esterline Technologies Corp., an aerospace manufacturer based in Bellevue, Wash., is paying $173 million for Racal Acoustics Ltd., a personal-communications equipment maker for defense and avionics businesses being sold by Harrow, UK-based ECI Partners LLP. Also, Carson, Calif.-based aircraft and space components maker Ducommun Inc. is buying Coxsackie, N.Y.-based DynaBil Industries Inc. from DeltaPoint Capital Management LLC and HSBC Capital (USA) Inc. for $47 million in cash and notes. DynaBil makes sheet metal components and assemblies for the aerospace industry.
For the year to date, the $1.06 trillion of merger-and-acquisitions transactions was sharply off from the $1.50 trillion of deals done in the record year of 2007. In numbers, 3,845 deals were struck this year, down from 5,058, according to data provided to CFO.com by mergermarket.
Muenchener Rueckversicherung Gesellschaft Aktiengesellschaft to buy HSB Group Inc. from American International Group Inc. for $742 million
German insurance company Munich Re Group paid cash to acquire the Hartford, Conn.-based holding company for Hartford Steam Boiler Inspection and Insurance Co. from New York City-based AIG, the insurance and financial services group. Terms called for Munich Re to assume HSB’s $76 million of outstanding capital securities. The transaction which is expected to complete in the first quarter of 2009.
Seller financial advisor: Blackstone Group; Goldman Sachs; JPMorgan; Morgan Stanley
Bidder financial advisor: Citigroup
Seller legal advisor: Sullivan & Cromwell
Bidder legal advisor: Dewey & LeBoeuf
St. Jude Medical Inc. to buy MediGuide Inc. from Elbit Systems Ltd. and Vitalife Life Sciences Venture for $283 million
St. Paul-based medical technology and services developer St. Jude agreed to acquire Haifa, Israel-based MediGuide, a developer of medical tracking and imaging devices, from Elbit and Vitalife, both based in Tel Aviv. The cash price is in addition to assumption of liabilities totaling $17 million. St. Jude Medical will pay $138 million of the total amount in December; $111 million in November 2009; and up to $34 million in April 2010. The transaction was completed on Dec. 22.
Seller financial advisor: Not Available
Bidder financial advisor: Banc of America Securities
Seller legal advisor: Amit, Pollak, Matalon & Co. Advocates and Notary; Morrison & Foerster
Bidder legal advisor: DLA Piper; Dorsey & Whitney; Gibson Dunn & Crutcher
Esterline Technologies Corp. to buy Racal Acoustics Ltd. from ECI Partners LLP for $173 million
Bellevue, Wash.-based Esterline, a manufacturing company serving the aerospace and defense markets, agreed to acquire private Racal, a Harrow, UK-based manufacturer of specialist personal communications equipment for the defense and avionics sectors. The seller, London-based ECI Partners, is a private equity firm. The deal is expected to close within 30 to 45 days.
Seller financial advisor: Hawkpoint Partners
Bidder financial advisor: Jefferies & Company
Seller legal advisor: Jones Day; SJ Berwin
Bidder legal advisor: Perkins Coie; Taylor Wessing
Wipro Technologies to buy Citi Technology Services Ltd. from Citigroup Inc. for $127 million
The Bangalore, India-based IT service company that is a subsidiary of Wipro Ltd. agreed to pay cash for Mumbai-based Citi Technology Services, a Citigroup unit that is engaged in infrastructure and technology outsourcing business. Terms call for Wipro and Citi to further agree to deliver Technology Infrastructure Services and Application Development and Maintenance services for a period of six years. The transaction is expected to close by March 2009.
Seller financial advisor: Citigroup
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available
FMC Technologies Inc. to buy a 45-percent stake in Schilling Robotics LLC from Schilling Robotics Employee Stock Ownership Plan for $116 million
Houston-based FMC, which serves the energy, food processing, and air transportation industries, agreed to acquire the stake in Davis, Calif.-based Schilling from the ESOP in a transaction expected to close before Dec. 31.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available
Harmonic Inc. to buy Scopus Video Networks for $48 million
Ha’ayin, Israel-based digital-video developer and marketer Scopus definitively agreed to be acquired by Sunnyvale, Calif.-based Harmonic, which provides video products. Terms call for $5.46 cash per Scopus share, offering a premium of 41.9 percent and an implied equity value of about $76.4 million. The transaction is expected to close in the first quarter of 2009.
Seller financial advisor: Thomas Weisel Partners Group
Bidder financial advisor: Deutsche Bank
Seller legal advisor: Goldfarb, Levy, Eran, Meiri, Tzafrir & Co; Skadden Arps Slate Meagher & Flom (advising Thomas Weisel Partners Group)
Bidder legal advisor: Wilson Sonsini Goodrich & Rosati
Ducommun Inc. to buy DynaBil Industries Inc. from DeltaPoint Capital Management LLC and HSBC Capital (USA) Inc. for $47 million
Carson, Calif.-based aircraft and space components and assemblies maker Ducommun agreed to acquire the private, Coxsackie, N.Y.- based DynaBil, which makes sheet metal components and assemblies for aerospace industry, for cash and notes.
Seller financial advisor: Houlihan Lokey
Bidder financial advisor: Internal
Seller legal advisor: Internal
Bidder legal advisor: Internal
Piramal Healthcare Ltd. to buy MINRAD Inc. for $45 million
Orchard Park, N.Y.-based MINRAD, which is in the acute-care medical devices and pharmaceuticals business, definitively agreement to be acquired by Mumbai-based Piramal, a pharmaceutical and healthcare company. Terms call for each of 49.302 million MINRAD shares to be purchased for 12 cents in cash, a premium of 100 percent. In addition, Piramal agreed to acquire MINRAD’s 8-percent senior secured convertible notes, worth $30.84 million. The transaction is expected to close in the in the first quarter of 2009.
Seller financial advisor: Barclays Bank
Bidder financial advisor: UBS
Seller legal advisor: Desai & Diwanji; Hodgson Russ
Bidder legal advisor: Ashurst; Reed Smith; Waller Lansden Dortch & Davis
LaBarge Inc. to buy Pensar Electronic Solutions LLC for $45 million
St. Louis-based LaBarge, which provides electronic components for manufacturing, acquired private, Appleton, Wis.-based Pensar, which makes electronic circuit boards.
Seller financial advisor: William Blair & Company
Bidder financial advisor: Internal
Seller legal advisor: Internal
Bidder legal advisor: Internal
Tadano America Holdings Inc. to buy SpanDeck Inc. from William E. Mitchell for $38 million
Houston-based Tadano, a subsidiary of Tokyo-based Tadano Ltd., and a holding company with interests in making and selling crawler cranes, agreed to acquire Franklin, Tenn.-based SpanDeck, a maker and seller of crawler cranes with a telescoping booms. The seller is an American private investor, and the price includes assumption of debt.
Seller financial advisor: Not Available
Bidder financial advisor: Nomura Holdings
Seller legal advisor: Not Available
Bidder legal advisor: Not Available
source: mergermarket
Tags: AIG, American International Group, Steve Wevodau AIG, Steven Wevodau AIG
POSTED BY STEVEN WEVODAU
WEBWIRE – Friday, December 26, 2008
NEW YORK.- American International Group, Inc. (AIG) today announced that Maiden Lane III LLC (ML III), a financing entity recently created by the Federal Reserve Bank of New York (FRBNY) and AIG, has purchased an additional $16 billion in par amount of multi-sector collateralized debt obligations (Multi-Sector CDOs). As a result, the associated credit default swap contracts and similar instruments (CDS) written by AIG Financial Products Corp. (AIGFP) have been terminated.
ML III’s purchases of CDOs, in conjunction with the termination of related CDS, have mitigated AIG’s liquidity issues in connection with its CDS and similar exposures on Multi-Sector CDOs. To date, ML III has purchased approximately $62.1 billion in par amount of CDOs. The associated notional amounts of AIGFP CDS transactions have been terminated in connection with all of these purchases.
The purchase of the additional $16 billion of multi-sector CDOs was funded by a net payment to counterparties of approximately $6.7 billion and the surrender by AIGFP of approximately $9.2 billion in collateral previously posted by AIGFP to CDS counterparties in respect of the terminated CDS. In accordance with an agreement with ML III, AIGFP received payments aggregating approximately $2.5 billion from ML III in connection with the November and December purchases of Multi-Sector CDOs.
As previously announced, AIG provided $5 billion in equity funding, and the FRBNY has agreed to provide up to approximately $30 billion in senior funding, to ML III. Of this amount, approximately $ 24.3 billion has been funded to effect purchases of CDOs. ML III will collect cash flows from the assets it owns and pay a distribution to AIG for its equity interest once principal and interest owing to the FRBNY on the senior loan have been paid down in full. Upon payment in full of the FRBNY’s senior loan and AIG’s equity interest, all remaining amounts received by ML III will be paid 67 percent to the FRBNY and 33 percent to AIG.
AIGFP continues to analyze possible means of eliminating its exposures to the approximately $2.6 billion of remaining physically-settled CDS and approximately $9.7 billion of “cash-settled” or “pay-as-you-go” CDS in respect of protected baskets of reference credits (which may also include single name CDS in addition to securities and loans).
Tags: AIG, Steve Wevodau AIG, Steven Wevodau AIG
POSTED BY STEVEN WEVODAU
TOKYO, Dec 24 (Reuters) - U.S. insurer American International Group said on Wednesday that it would halt the merger between its two Japanese life insurers, AIG Star Life Insurance and AIG Edison Life Insurance.
AIG, once the world’s largest insurer, said in October that it would postpone the merger between AIG Star and AIG Edison, which was originally scheduled to take place on January 1, 2009.
But the merger process is now officially on hold as AIG plans to sell shares in AIG Star and AIG Edison along with American Life Insurance Co (ALICO) under its global restructuring plans, said AIG in a statement.
“The merger should reflect the intention of new shareholders,” AIG said in a statement.
AIG has been trying to sell assets after nearly collapsing in September and has said it plans to sell its businesses in Asia including Japan, Taiwan and the Philippines.
(Reporting by Mariko Katsumura)
Tags: AIG, American International Group, Steve Wevodau AIG, Steven Wevodau AIG