Of course, AIG borrowed cash through the bailout. It borrowed a lot more than numerous though. A lot of talk was around the installment loans the company took. This was $130 billion that originated from the taxpayers. AIG is apparently doing really well now. Several billion has been paid back to the government when debt negotiation is being figured out between it and the Treasury. The business plans to get fast money by converting to common shares from the 80 percent in preferred shares the government holds.
Treasury works to help AIG create a payment plan
There isn’t really a company that got emergency loans from the government that does not want those balances reduced to zero. The government took of preferred shares from American International Group. This was in exchange for the $132 billion loan that originated from taxpayers. American International Group has worked hard since them to repay the government with creating capital and selling sub-companies. Payment plans are what the Treasury office and American International Group met to discuss. USA Today explains this. The company hopes that in two years, it could be debt free. That is the plan it has made.
Stock sale
The bulk of the fund raising would be done via sale of stock. The government petty much owns AIG right now. It has about 80 percent of the company’s preferred shares. There is a large difference big difference between preferred shares and common shares. There is usually more in dividends although security is lacking when compared to bonds. The preferred shares the government holds would be converted to almost a 90 percent share of common stock, which would be offered by the government to investors. The government would be able to make some cash off of it if the stock price went up.
AIG keeps on fighting
American International Group is nevertheless in debt to the government. It owes about $100 billion still. That is a lot of cash for any corporation to get together in two years. As non-essential divisions of the company are being sold off, the company is doing well in settling accounts.
Find more info on this subject
USA Today
usatoday.com/money/industries/insurance/2010-09-14-wsj-AIG_N.htm
