American International Group, Inc. confirmed that, as a result of the recently completed auctions by the Federal Reserve Bank of New York of certain Maiden Lane III assets, the outstanding loan by the FRBNY to ML III has been fully repaid.
According to a release, the ML III loan was non-recourse to AIG, and was being repaid with the cash flows from the interest and principal payments and liquidation of the assets in the facility.
"The repayment of the Federal Reserve's Maiden Lane III loan represents another significant milestone in the transformation of AIG," said Robert H. Benmosche, AIG President and Chief Executive Officer. "We are extremely encouraged by the continued progress our partners at the Federal Reserve and U.S. Treasury have made to profitably reduce the U.S. government's investments in AIG."
To date, AIG said, it has paid in full the FRBNY Credit Facility, the AIA SPV preferred interests, and the American Life Insurance Company SPV preferred interests. In addition, the U.S. Treasury's stake in AIG common stock has been reduced by $17.5 billion and the Maiden Lane II and III loans have been fully repaid. The Federal Reserve has earned nearly $3 billion from the sale of the Maiden Lane II portfolio and, based on current market values, could earn as much when the ML III portfolio is fully liquidated.
The maximum support authorized by the U.S. government to AIG reached $182 billion in 2008, of which $21 billion was unused or expired. Together with repayments, withdrawals, exchanges, sales, and other actions, total outstanding government support to AIG has decreased 83 percent, or $152 billion, with approximately $30 billion worth of shares of AIG common stock owned by the U.S. Treasury as the remaining investment. It should be noted that the $152 billion decrease only includes a reduction of original authorized support and not the Federal Reserve's profit to date on ML II or the expected profit for ML III.
American International Group, Inc. is an international insurance organization serving customers in more than 130 countries.
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