Report: AIG to get 30 bln dollars more bailout aid

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(Agencies)
Updated: 2009-03-02 09:43

WASHINGTON– US insurance giant AIG is to receive up to an additional US$30 billion in federal assistance in the latest overhaul of its government bailout, US media reported Sunday.

US insurance giant AIG is to receive up to an additional 30 billion dollars in federal assistance in the latest overhaul of its government bailout, US media reported Sunday. [Agencies]

Under the new plan, American International Group, Inc. is to repay most of the 40 billion dollars it owes the Federal Reserve with equity stakes in two of its overseas units, according to The Wall Street Journal.

The units were American International Assurance Co., which is based in Asia, and American Life Insurance Co., which operates in 50 countries.

AIG was originally supposed to repay the Federal Reserve in cash with interest.

The New York-based company, already set to announce a fourth-quarter loss of some 60 billion dollars on Monday, would also convert between five and US$10 billion in debt into securities, backed with life insurance assets.

The 60-billion-dollar Federal Reserve credit that AIG received in November, from which the company has already withdrawn US$40 billion, would then be reduced to US$25 billion.

The newspaper said AIG's board met late Sunday to vote on the plan and was "expected to give its approval."

"Major credit rating agencies have already signed off on the deal," it added.

The US government bailed out AIG for more than US$150 billion last year after a home mortgage crisis that sent shock waves across the global financial markets.

The bailout plan was the largest in US history and came as AIG burned through billions of dollars of cash and reported a third-quarter loss of US$24.47 billion.