March 16, 2009 / 10:17 AM / 11 years ago

CORRECTED - UPDATE 1-SocGen defends payments from AIG

(Corrects 7th paragraph to read...collateralized debt obligations ... not..default obligations)

* Says issued collateral calls to AIG

* Payments conformed with counterparty deals

(Adds statement quotes, background)

PARIS, March 16 (Reuters) - French bank Societe Generale (SOGN.PA) defended its actions after the disclosure that it was among European banks which received payments from U.S. insurer AIG (AIG.N) following its bailout.

France’s third biggest by market value said on Monday it had acted within its rights to call on AIG for cash. “Societe Generale acted in this matter in full conformity with our counterparty agreements with AIG,” it said in a statement.

“Societe Generale issued collateral calls to AIG in accordance with the terms of those agreements as a result of specified credit events at AIG,” it said.

“The collateral posted by AIG, and the amounts paid, were fully consistent with the terms of those agreements.”

Among European banks, SocGen was the biggest recipient at $11.9 billion, Deutsche Bank AG (DBKGn.DE) received $11.8 billion and the UK’s Barclays Plc (BARC.L) was paid $8.5 billion.

AIG, which has received federal bailouts totalling $173 billion, said on Sunday it had paid billions of dollars to a number of banks, partially in the form of collateral to back up credit default swaps, a form of financial insurance.

The sums also included purchases of collateralized debt obligations, a debt security that underlay that insurance, and payments to counterparties of a securities lending program.

AIG unveiled a list of payments amid growing pressure on the insurer to disclose the beneficiaries of the U.S. bailout ahead of a congressional hearing on Wednesday. [ID:nLG664530]

The AIG disclosures do not include payments since Dec. 31. (Reporting by Tim Hepher; Editing by David Holmes)

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