AIG Seeks Bailout Debt Restructure

by Jordan Yerman | February 24, 2009 at 12:41 pm

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AIG, the zombified insurance company that sucked up $150 billion in bailout money, is seeking to restructure the terms of the loan, as it cannot find potential buyers of its subsidiary, American Life Insurance.

This restructuring would shift responsibility away from itself and towards... you. Post-bailout, AIG is alreayd 80% taxpayer-owned.

Several outlets reported on Monday that AIG planned to announce up to a $60 billion loss the following week, and was seeking additional assistance from the government. Such a loss would likely trigger more ratings downgrades, forcing the firm to put up more cash as collateral for its debt obligations.

AIG responded by saying it "has not yet reported fourth-quarter and 2008 year-end results," and is working with the Federal Reserve Bank of New York "to evaluate potential new alternatives for addressing AIG's financial

Under the plan, the government loan of up to $60 billion at the heart of the bailout would be repaid with a combination of debt, equity, cash and operating businesses, such as stakes in AIG's lucrative Asian life-insurance arms.