AIG Says It Counted as Much as $2.3 Billion of Repos as Sales
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American International Group Inc., the bailed-out insurer, said it classified as much as $2.3 billion of repurchase agreements and $3.8 billion of securities- lending transactions as sales in calculating quarterly results.
In late 2008, “certain of AIG’s counterparties demanded significantly higher levels of collateral to enter into repurchase agreements, which resulted in sales rather than collateralized-financing” treatment under accounting guidelines, the New York-based insurer said in an April 13 letter to the Securities and Exchange Commission released today. The accounting didn’t materially affect any ratios or metrics the company publicly disclosed, AIG said in the letter.