AIG clarifies debt, owes US government US$83.6 billion

AIG must repay the government US$83.6 billion, the company reported, “in response to continuing confusion regarding the amount of assistance AIG has received from the government and the amount it must repay.” The company received a total of US$182.3 billion in authorized assistance and has a total outstanding assistance of US$120.7 billion. AIG says it currently owes US$38.8 billion on a revolving credit facility and US$44.8 billion in equities, totaling US$83.6 billion in debt.“The difference between the US$83.6 billion to be repaid by AIG and the US$120.7 billion in outstanding assistance is due from the Maiden Lane entities,” according to a statement. In 2008 Q4, the Federal Reserve Bank of New York (FRBNY) created two financing entities — Maiden Lane II and Maiden Lane III — and made loans totaling approximately US$44 billion to these entities, which used the funds to purchase value-impaired assets from AIG and its counterparts. The FRBNY provided AIG with a revolving credit facility of up to US$60 billion over a five-year period. As of Sept. 2, 2009, AIG owed US$38.8 billion, including accrued compounding interest and fees. Additionally, the US Treasury Department invested US$41.6 billion in AIG preferred stock through the TARP program. The department furthermore provided a commitment of up to US$29.835 billion in connection with the issuance of additional TARP equity, of which, AIG has drawn US$3.2 billion. In exchange for a reduction of US$25 billion in the outstanding debt under the FRBNY facility, AIG will issue to the FRBNY preferred interests in special purpose vehicles holding equity in certain AIG subsidiaries.