AIG: Give Us a New Deal
For the past week, advisers close to insurance giant AIG have been pushing the government to renegotiate the rescue of the insurance giant, and one proposal has the government guaranteeing the company’s debt, The Post's Carol D. Leonnig reports.
The $143 billion loan offering to prevent AIG from going bankrupt has turned into a golden noose, as the company pays off billions of dollars in bad bets on mortgage investments and is forced to pay 14 percent interest on the cash it is shoveling to other banks and creditors.
A federal guarantee would erase the need for AIG to post tens of billions of dollars in collateral while trying to sell off assets at fire-sale prices in a depressed economy.
Former chief executive Maurice “Hank” Greenberg, other major shareholders and even government advisers have urged the Federal Reserve Bank of New York to instead guarantee those debts and stop AIG’s hemorrhaging, sources close to the discussions said.
-- Frank Ahrens
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November 7, 2008; 10:42 AM ET
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