Feds to the Rescue Again for Troubled AIG

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CBNNews.com - The government has unveiled a new plan to rescue insurance giant American International Group, by providing the struggling company another $30-billion on an "as needed" basis.

This is the fourth time the government has stepped in to help AIG.

The company has already burned through cash, and has tried to sell parts of its business to pay back its current loans. But it couldn't find any buyers.

The existing aid package already totals around $150 billion. Under the new package, the Federal Reserve will take stakes in two international units.

Instead of paying back $38 billion in cash with interest that it has used from a Federal Reserve credit line, AIG now will repay that amount with equity stakes in Asia-based American International Assurance Co. and American Life Insurance Co., which operates in 50 countries.

"The additional resources will help stabilize the company and in doing so help stabilize the financial system," the agencies said.

AIG executives reported today that it lost $61.7 billion in the fourth quarter of last year.

AIG is a Wall Street giant with financial districts worldwide. The company operates in more than 130 countries and $1 trillion in assets on its balance sheet.

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