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American International Group, Inc. Message Board

  • asif10912 asif10912 Aug 1, 2009 11:12 PM Flag

    Some facts from AIG website


    "AIG announced its intention to form a general insurance holding company, composed of its Commercial Insurance Group, Foreign General unit, and other property and casualty operations, to be called AIU Holdings, Inc, with its own board of directors, management team and brand distinct from AIG. The name of the company is derived from American International Underwriters, a world-class organization whose legacy can be traced back to its formation in 1926. AIU Holdings, Inc. includes the largest U.S. underwriters of commercial and industrial insurance, and the most extensive international property-casualty network. AIU Holdings, Inc. is a unique leading franchise with more than 40,000 employees worldwide and over 650 products and services that generate net premiums written in excess of $40 billion. The grouping of businesses under AIU Holdings, Inc. will assist AIG in preparing for the potential sale of a minority stake in the business, which ultimately may include a public offering of shares, depending on market conditions.

    • AIG has entered into an agreement with the FRBNY to (1) transfer its equity ownership of American Life Insurance Holding Company (ALICO) to a special purpose vehicle in exchange for preferred and common interests and a reduction of the debt owed by AIG under the FRBNY revolving credit facility, and the amount available to AIG of $9 billion; and (2) transfer its equity ownership of American International Assurance Company Limited (AIA) in return for a reduction of the debt owed by AIG under the FRBNY revolving credit facility and the amount available to AIG of $16 billion.

    • AIG announced that it expects to transfer to the FRBNY embedded value of up to $8.5 billion, representing securitization notes of certain of its U.S. life insurance businesses, in return for a further reduction in its outstanding FRBNY revolving credit facility balance. This capital management strategy—securitization —will not affect the day-to-day operations, sales activities or customers of these businesses.

    • Going forward, AIG will continue to have access to amounts remaining under the FRBNY revolving credit facility. The reduction of the outstanding amount on the facility, which will result from the closings of the AIA and ALICO preferred interests and securitization transactions, will not reduce the total amount available to AIG under the facility to less than $25 billion."

    AIG owes about 80 billion (40 billion tarp and 40 billion loan balance), its selling half of AIA and ALICO to the FED for 25 billion, and it has raised about 7 billion so far through all other sales. Add a possible ILFC sale of 5 billion and the further 8.5 billion reduction for securitization mentioned above.Thats about 45 billion paid off out of 80, balance is 35 billion or so.

    AIG will still own half of AIA and ALICO and all of AIU. AIU is worth about 40 billion by itself. Thats combined remaining equity of about 65 billion. Pay off the 35 billion balance and 30 billion is left over stockholder equity. I am not a financial analyst but this is my deduction from what is clearly posted on the website. AIG is a 10 dollar presplit and 200 dollar postsplit stick when its all said and done, in a few years. Everyone that claims that AIG is selling off all good assets is just talking shit considering the facts. Sure it will never go back to its former glory, but it can emerge from this mess.

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