Contributing to everyone's confusion, here is mine:
1. No immediate dilution. No issuing of shares neither conversion of warrants. 2. Time to dispose of assets with less hurry in better negotiating conditions. 3. Repayment of loan at higher rate throughout 24 months, of only the portion needed. 4. Loan collateralized as warrants in case of non-payment. 5. Bankruptcy averted 100%. 6. No change in management.
In my view, this is a good deal for shareholders. The company has bought plenty of time for a turnaround and clean up. Given that the CEO was going to present a comprehensive restructuring plan on 9/25 that included asset sales, in just a few weeks the stock may appreciate considerable as the repayment may become much more certain. If no other bank implosion (losses for AIG through issuance of CDSs) or if foreclosure rate of change diminishes, then we go north from tomorrow's opening.
From the Fed PR it is not clear how the warrants will be triggered specifically and/or how the collateral will cease to exist or the warrants returned to the company.
If the stock was trading at an "apparent" huge dilution or possible bankruptcy at $3.75, then we should see levels north of that in the coming days.
Seriously, why would the government lend 85 bill if they thought this company be BK in the near term? Goverment wants to make money here... and they can if AIG is back in business!