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Article: AIG putting two life units toward federal debt; Federal Reserve accord reflects tough market conditions, experts say.(American International Group Inc.)
- Article from:
- Business Insurance
- Article date:
- June 29, 2009
- Author:
CopyrightCOPYRIGHT 2009 Crain Communications, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: JUDY GREENWALD
NEW YORKAmerican International Group Inc.'s move to give the Federal Reserve Bank of New York preferred interests in two life insurance units in exchange for cutting AIG's debt by $25 billion is a logical strategy in light of market conditions, observers say.
Analysts say the step reflects the current difficulty that AIG faces in getting appropriate compensation for the two unitsAmerican International Assurance Co. Ltd and American Life Insurance Co.either through an initial public offering of stock or a private transaction.
In March, AIG said it planned to establish special-purpose vehicles for subsidiaries American ...