AIG signed the CDS agreements with Goldman Sachs that called for AIG to pay billions based solely on GS's opinion of what was owed. That would seem to be a much bigger oversight than forgetting about a 2001 filing which guaranteed the American General Debentures.
if FIG idemnified AIG I would assume that would be something that would be clearly stated in the 8K. I saw nothing that would hint at this, so again, this was a big mistake by Benmosche and AIG, or the maybe the prospectus changed since then? I am not sure, but man would this be fantastic to watch go down if AIG did in fact sell AGF for 130 million, and assume a portion of the debt without even knowing it.
The wording in the XFP prospectus is clear and unambiguous. FIG may have indemnified AIG against any losses that might arise from the guarantee, but it seems that AIG is still the ultimate guarantor of the debentures.
or, it does exactly what the company ceo said it does, removes a "drag" on the company's credit rating:
<<<Mr. Benmosche told DealBook that holding onto A.G.F. made sense when A.I.G. retained a top-flight credit rating, which helped provide the equivalent of a steady capital base.
Since the insurer’s near collapse, however, it has become more costly, and Mr. Benmosche told DealBook that the unit, a subprime lender, was “a potential drag” on an investment-grade rating for A.I.G. In December, Moody’s Investors Service cut its credit rating on AGF to B2 from Baa3.>>>
MKS & XFP are still guaranteed by AIG from the XFP prospectus:
"As reported in the AIG's Annual Report on Form 10-K for the fiscal year ended December 31, 2001, the Debenture Issuer is a wholly-owned subsidiary of AIG and, as of November 2001, AIG has provided a full and unconditional guarantee of all outstanding debt of the Debenture Issuer. In addition, pursuant to a certain guarantee dated as of November 1, 2001, AIG guaranteed all payment obligations of the Debenture Issuer under the Underlying Securities Guarantee. AIG is subject to the information reporting requirements of the Exchange Act...." http://www.sec.gov/Archives/edgar/data/829281/0000905148-02-002621.txt
Underlying Securities Issuer........... American General Institutional Capital A.
Debenture Issuer....................... American General Corporation.