Fed Said to Plan Reining in AIG Loans by $3.6 Billion
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The Federal Reserve plans to cut American International Group Inc.’s credit line by about $3.6 billion in a sign of confidence the insurer can reduce reliance on taxpayer funds, said a person with knowledge of the proposal.
Under terms of AIG’s 2008 rescue, paying down the line was supposed to lower the amount of credit available. The Fed gave an exemption in 2009 on $3.6 billion in proceeds from asset sales and has decided this year that the relief may no longer be necessary, said the person, who declined to be identified because the plan isn’t public. AIG had $13.3 billion in credit remaining on the line as of June 30.