With its first two bailouts coming as blockbuster hits, American International Group Inc. may be trying to capture the magic all over again: AIG chieftain Edward Liddy said he's hoping to rework the terms of the company's (
already reworked) $150 billion rescue package after Timothy Geithner takes over as President-elect Barack Obama's treasury secretary next year.
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The Wall Street Journal is reporting that in an interview on Tuesday, Liddy
said, "As soon as we make good progress on
selling assets and
paying down that debt, we intend to go down to Washington, D.C., and
negotiate with the new Treasury secretary."
Among the issues Liddy hopes to address are the 10% dividend
on the government's preferred shares and perhaps a whittling down of
the government's 79.9% stake in AIG. "We would very much like the
interest rate on the perpetual preferred [shares] to be lower," Mr.
Liddy said. And "I personally believe the 79.9% is too high a stake. It
kind of chokes out any private market" investment.
Liddy may have some good points to make as he tries to save the
sinking ship, but with the number of bailouts growing by the week (and
the deficit with it), asking the newly installed Obama administration
to spend political capital on the publicly unpopular task of adjusting
AIG's terms again will be a tough case to make. Then again, if there's
ever a time to ask for something sure to be fodder for late-night
comedians, the time to do it will be during Obama's honeymoon period. -
George White
See story from The Wall Street Journal (subscription required)
See Dealscape post on AIG asset sales
See Dealscape post on AIG's second bailout
