China in auto power play
It might not shake up the industry just yet, but China's interest in Volvo and Saab is the start of something big in global autos, writes columnist Wei Gu. Commentary
AIG sells $39.3 billion in assets to NY Fed's fund
NEW YORK (Reuters) - American International Group (AIG.N), the insurer bailed out by the U.S. government in September, said on Monday it sold $39.3 billion of assets to a fund established by the Federal Reserve Bank of New York.
The new fund, Maiden Lane II, was created to hold mortgage liabilities from an AIG securities lending portfolio that caused huge losses to the troubled insurer, the company said in a press release.
The New York Fed extended the loan to Maiden Lane II to enable the purchase of the securities for $19.8 billion.
AIG, once the world's largest insurer, said it agreed to add $5 billion in cash to the fund, which will eliminate liquidity issues associated with the company's securities lending program and facilitate the repayment of its debts.
The deal is part of a plan to clear the insurer of its obligations on mortgage debt.
The need to post increasing amounts of collateral to counterparties for other mortgage assets held by a financial products unit left AIG with $42.5 billion in losses over the last year.
The U.S. government saved AIG from bankruptcy in September with a rescue plan that has ballooned to about $152 billion so far.
(Reporting by Juan Lagorio; editing by Leslie Gevirtz)
