AIG - langsam aber sicher wieder in alten Höhen !?

With American International Group Inc.'s sales of AIA Group to Prudential plc and American Life Insurance Co. to MetLife, AIG says it is on track to potentially be able to pay back more than $50 billion in debt.

The transactions are being heralded as a "reflection of wisdom in not engaging in fire sale transactions, waiting to maximize the return," said AIG spokesman Mark Herr. A year ago the company was hoping the life insurance subsidiaries would fetch $25 billion, he added.

Where the Cash is Going

The deals will provide AIG with about $31.8 billion in cash to use immediately to pay down its outstanding balance to the Federal Reserve Bank of New York. AIG closed two transactions late last year to reduce the debt it owed the bank by $25 billion.

AIG (NYSE: AIG) placed the equity of AIA and Alico into special purpose vehicles.The FRBNY got preferred interests with a liquidation preference in the AIA vehicle of $16 billion and $9 billion for the Alico vehicle (BestWire, Dec. 1, 2009).

With the $25 billion in cash from the AIA sale -- the largest for AIG to date -- the company can wipe out the $16 billion of preferred interest the FRBNY has in AIA and use $9 billion on the FRBNY's revolving credit facility. At the end of 2009, AIG owed $17.9 billion in revolving credit plus about $5.5 billion in interest and fees.

However, AIG does not have enough cash from the Alico deal to redeem all of the $9 billion of preferred interest the FRBNY holds in Alico. AIG will give the FRBNY the $6.8 billion it got in cash from MetLife.

The Plan for the Rest

AIG will look to repay the remainder of the FRBNY preferred interest in Alico when it is able to sell $8.7 billion in securities of MetLife over time. Other revenue from the sale of securities can go toward the credit facility.

Herr said AIG can sell a certain amount of securities after nine months and another amount after 12 months. AIG expects to generate more than $19 billion in securities from both deals "subject to the market; that's our best look at it today," Herr said.

When MetLife confirmed it was talking to AIG about a deal, A.M. Best Co. said the magnitude of the transactions is significant. "As a result, there is uncertainty with respect to the impact on MetLife's balance sheet, capitalization and financial metrics; thus, the ratings have been placed under review with negative implications," A.M. Best said of MetLife's current Best's Financial Strength Rating of A+ (Superior).

If all goes according to plan, the Alico and AIA transactions will result in AIG repaying the government about $50.7 billion of the $95 billion it owes as of Dec. 31, 2009. The federal government made available about $182 billion. Herr said AIG's outstanding balance fluctuates as it taps the credit facility and continues to repay it on a fairly steady basis.

Neither deal has any bearing on $47.3 billion owed to the U.S. Department of the Treasury.


Quelle: http://insurancenewsnet.com/article.aspx?id=171571