AIG Confirms Proceeds from Maiden Lane III Auctions Fully Repaid $5.0 Billion Loan, with Interest, Made by AIG in 2008
American International Group, Inc. (NYSE: AIG) confirmed today the company has been fully repaid for the $5.0 billion loan it extended to Maiden Lane III LLC (ML III) in 2008. The repayment comes from proceeds from completed auctions by the Federal Reserve Bank of New York (the FRBNY) of certain ML III assets.
“AIG remains committed to making American taxpayers whole, plus a profit,” said Robert H. Benmosche, AIG President and Chief Executive Officer. “The continued successful sale of ML III assets is another sign of the progress we have made with our partners at the U.S. government to achieve our goal of profitably reducing the American taxpayer's investments in AIG.”
When originally set up in 2008, ML III borrowed $24.3 billion from the FRBNY, which, together with a $5.0 billion loan provided by AIG, was used to purchase a portfolio of collateralized debt obligations from certain counterparties of an AIG subsidiary. AIG was repaid a total of $5.6 billion, which includes interest on the loan owed to AIG from ML III. AIG and the FRBNY had previously confirmed that the outstanding loan by the FRBNY to ML III had been fully repaid. AIG will continue to receive one third of residual profits generated by future sales of ML III assets, and has already received $427 million from residual profits so far.
The maximum support authorized by the U.S. government to AIG reached $182 billion in 2008, of which $21 billion was unused or expired. Together with repayments, withdrawals, exchanges, sales, and other actions, total outstanding government support to AIG has decreased by approximately 83 percent, or $152 billion, with approximately 1.06 billion shares of AIG common stock owned by the U.S. Department of the Treasury as the remaining investment. It should be noted that the $152 billion decrease only includes a reduction of original authorized support and not the FRBNY's profit on ML II or the profit to date from ML III.
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