aig insurance aircraft
NEW YORK – Insurer American International Group Inc (AIG.N), working to avoid downgrade and shore up the capital of its holding company, has made a unprecedented approach the Federal Reserve seeking $ 40 billion in short-term financing, the New York Times.
front "> Target =" _blank "href =" http://www.himfr.com/buy-front_top/ ">" before> http://www.himfr.com/buy-front_top/ "> topChief front executive, Robert Willumstad went to the Fed late on Sunday, according to reports in The Times, The Wall Street Journal and business news channel CNBC.
AIG struggles to secure a lifeline from the Fed was late for one of the worst days on Wall Street, with Lehman Bros on the verge of collapse, and Bank of America moving to takeover Merrill Lynch & Co.
The Fed normally oversees monetary policy and supervision of banks, but CNBC said AIG was seeking the funds as a temporary measure and planned to repay the central bank revenues from asset sales.
Rating agencies have threatened to cut AIG's ratings by Monday morning, said the New York Times.
AIG officials did not immediately respond to requests for comment.
The company, until recently the world's largest insurer by market capitalization, has been trying to forge a strategic emergency plan after its shares fell almost 50 per cent last week on fears it faced a liquidity crisis.
AIG has been negotiating with various parties including officials from the Department of Insurance New York and private equity firms as it seeks ways to free up capital, raise capital again and protect policyholders.
Regulators, including New York, Insurance Superintendent Eric Dinallo have taken refuge in New York offices of AIG in the past two days trying to forge a plan.
"We are working to design a solution to protect the company and policyholders, "said a person from New York Insurance Department, who requested anonymity.
Former AIG CEO Maurice "Hank" Greenberg, who ran the company for nearly four decades, did not participate in any of the discussions, said his spokesman, Glen Rochkind.
"He repeatedly offered to help in any way possible," added Rochkind.
AIG, hit $ 18 billion in losses over the past three quarters from guarantees it wrote on mortgage derivatives, has had to act quickly after Standard & Poor's said on Friday it may downgrade AIG.
Ratings cuts could force AIG to post up to 14.5 thousand million dollars more in collateral, according to a regulatory filing last month.
Analyst estimates also could be detrimental AIG's insurance business, since some policies contain clauses that nullify a contract in the case of reduction below a certain level.
For the purpose of week, the insurer has been working on a three-part plan involving asset sales, capital from regulated insurance operations of society portfolio, and working with private equity investors, said a person familiar with the negotiations.
The New York Times said AIG's plans to shift capital had to be put on ice because of the time and complexity involved, and that private equity firms withdrew interest in the company's financial health precarious.
Parties to the capital fund talks with AIG included buyout firms Kohlberg Kravis Roberts & Co. and JC Flowers & Co, another person familiar with the talks.
An AIG spokesman earlier confirmed the company was evaluating a wide range of options, including asset sales.
Media Reports have said that one of the companies on the block was AIG's highly profitable aircraft leasing arm, but the spokesman refused to confirm this was the case.
In late June, AIG said the unit, International Lease Finance Corp, would remain part of AIG.
AIG was founded in China 89 years ago. In the years later, largely under Greenberg's watch, became one of the world's largest insurers, which covers 130 countries and territories and serving 74 million customers.
Greenberg, resigned in 2005 amid an accounting scandal. His successor, Martin Sullivan, was replaced by Willumstad in June after investors grew unhappy in its three quarters of losses.
Greenberg owns or controls about 12 percent of AIG shares, making it the largest shareholder.
From: chinadaily
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Article Source: ArticlesBase.com – Aig, Facing Liquidity Crisis, Seeks Fed Lifeline
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