AIG Amends Credit Pact, Boosts Units’ Access to Financing
American International Group Inc. (AIG), the insurer that counts the U.S. Treasury Department as its largest shareholder, reached agreement with lenders on an amended credit deal that will make more financing available for subsidiaries.
The revised 4-year deal provides a $4 billion facility, with $2 billion of credit available to subsidiaries, New York- based AIG said today in a statement. It replaces a $4.5 billion facility that had a $1.5 billion letter of credit for the units.
AIG is increasing financial flexibility for units as Treasury reduces its stake acquired in the firm’s bailout that began in 2008 and swelled to $182.3 billion. The insurer spent $5 billion to buy back U.S. shares last month in a deal that helped cut Treasury’s stake to 16 percent.
“The terms of this credit facility are more favorable and provide greater flexibility,” Chief Financial Officer David Herzog said in the statement.
JPMorgan Chase & Co. (JPM) and Citigroup Inc. were the lead arrangers, AIG said.
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