Bigger Bailout Expected for AIG
The government is expected to come to AIG’s rescue for a fourth time as the mega-insurer prepares to announce the biggest quarterly loss by a single company in the history of the world. Reports put the bonus bailout at $30 billion, less than half of AIG’s expected quarterly loss.
New York Times:
The federal government is preparing to loosen the terms of its huge loan to the American International Group and provide another $30 billion to the insurer as it prepares to report the biggest quarterly loss in history on Monday, $62 billion, people involved in the discussions said Sunday night.
The intervention marks the fourth time that A.I.G., the giant insurer, has had to seek assistance from the federal government. The government already owns nearly 80 percent of the insurer’s holding company as a result of the earlier interventions, which included a $60 billion loan, a $40 billion purchase of preferred shares and $50 billion to soak up the company’s toxic assets.
The deal would have the government commit another $30 billion in cash to A.I.G. from the Troubled Assets Relief Fund, should the company need it, according to the people involved in the talks.