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As The Wall Street Journal reported, The scarcity is in turn giving potential buyers more pricing leverage, making it harder for AIG to raise the sums it needs. "Asset valuations are dropping and they're drawing down more money," said one person close to the insurer. "You don't need to be a rocket scientist to see that there could be some issues here." Consequently, the AIG asset sale has turned into a waiting game. Potential
buyers seem to be holding out for the best bargains, while taxpayers
and politicians apply more pressure on AIG to make divestments. AIG currently has borrowed $61.3
billion of its $85 billion rescue package, plus $19.9 billion under a
second $37.8 billion program related to its securities-lending
business. At the same time, AIG reduced the amount it owes the U.S. government by $2.3 billion by using the Federal Reserve's new commercial-paper-funding program. So, even though it hasn't sold off many assets, it has started paying some of its loans back. But even under possible renegotiated government terms of backstoping AIG's credit default swap contracts or an extended duration of the two-year loan facility, those asset sales will be key to paying back AIG's loans to the government in full, which includes the 8.5% interest rate that The Wall Street Journal thoroughly explains. AIG is expected to report a third-quarter net loss of $3.84 billion on Nov. 10, and will likely not announce any asset sale deals, according to Bloomberg. So, at what stage are the AIG divestments at?Reuters is reporting that the asset sales will happen before the end of the year. The U.S. personal lines business (valued between $5 billion and $7 billion), its Hartford Steam Boiler Inspection and Insurance Co. and its 60% stake in Transatlantic Holdings Inc. will apparently sell soon, according to the report. AIG will also sell part of its Asia-based life insurance unit, AIA in China, Singapore, Thailand, Indonesia and
Malaysia. Trading Markets is reporting that around 30 buyers are in talks with AIG, but analysts believe that China Life Insurance Co.
Ltd. is one of them. Because of its asset sale, AIG postponed a planned merger of two of its units in Meanwhile, the Financial Times interviewed Philip Scott, finance director of Aviva, who said that the company was not interested in AIG's assets because "at this stage ... any price negotiations would be grossly overvalued." AIG Advisor Group is for sale as a one-package deal, which includes: Royal Alliance; AIG Financial Advisors; FSC Securities; AIG Annuity, the largest issuer of fixed annuities in the U.S.; AIG Retirement; AIG SunAmerica, a retirement income group; AIG SunAmerica Asset Management; AIG SunAmerica Affordable Housing Partners; and AIG SunAmerica Alternative Investments, according to Rep.Advisorland. - Maria Woehr Now, there are several more assets on the block. You can find those assets listed in these Dealscape blogs: U.K.'s Pru definitely has eyes for AIG's Asian assets AIG gets more cash and faces growing pressure to sell assetsCategories Deal Video
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American International Group Inc. will likely have to renegotiate the terms of its $85 billion rescue package with the U.S. government after all. So, it's not surprising that its original plan to pay back the loans through asset sales is not happening as planned because strategic buyers are having a hard time getting financing. 
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