AIG to Make Biggest Payment
Yet for $4 Billion to Government
AIG is dayTrending today because it was announced by the insurance conglomerate that they would make it's largest single payment to the Federal Reserve Bank of New York. AIG was on the fast track to financial collapse and bankruptcy just a few years ago before the Federal Recovery and Reinvestment act loaned a capital infusion of $182 billion dollars into the struggling giant.
The pay back was made possible by AIG liquidating its aircraft leasing company, International Lease Finance Corporation, for a sum total of $4.4 billion. AIG will still have a balance of about $21 billion in debt to the NY Fed including interest.
"This is continuing tangible evidence of AIG's progress in repaying the American taxpayers. AIG is getting stronger every day. We still have more work to do, but we will finish the job and make sure we repay the American taxpayers." said Robert Benmosche, AIG President and CEO. The remaining balance owed the government still totals over $100 billion.
ILFC, one of the world's largest commercial jet fleet lease companies based out of Los Angeles, was able to free up about $10 billion in funds that were held in collateral by the Fed under the credit agreement. This and other note issues improved the overall total liquidity to over $12 billion for the airline company. "(The offerings) are a direct reflection of our company's viability and future prospects as a leader in leasing aircraft to the world's airlines," said Henri Courpron, ILFC CEO. He also remarked that the company has over $13 billion in new aircraft orders with the airline industry.
Regulators and experts that include a report from the Congressional Oversight Panel still fear that U.S. taxpayers may never fully be repaid the entire loan they have put into AIG. They have just come out of a second quarter loss posting $538 million in red ink.