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— Deals —
 "American International Group Inc. was the catastrophic failure the U.S. government wouldn't let happen.
Instead, AIG emerged as Washington's largest-ever private sector
bailout. For many, this amounts to de facto nationalization, although
critics charge the government got too little in return. So far,
Treasury and the Federal Reserve have forked over [$180 billion] in loans
and cash, as they've fiddled with various approaches to steady the
insurance giant and keep it from crushing others." - Matt MillerIn order to repay the government's loan, the insurer has been shedding assets. As of May 7, AIG has sold off $4.4 billion in assets. Here's a list:
May 6, 2009: AIG will announce first-quarter results on April 7. Losses this quarter are expected to be significantly lower than the record $61.7 billion net loss the insurer had in the fourth quarter, meaning it might not need another bailout, according to Reuters. Analysts estimate that the insurer will report a loss of 6 cents a share on revenue of $26.17 billion. - Maria Woehr May 6, 2009: AIG actually paid $454 million in bonuses to employees. That's $8,832 per employee. - Maria Woehr May 4, 2009: AIG is reportedly close to divesting its Japanese headquarters and International Lease Finance Corp., according to reports. - Maria Woehr May 1, 2009: AIG's CEO Edward Liddy will be testifying before the House Committee on Oversight and Government Reform on May 13. Liddy is also the latest CEO to accept $1 salary for 2008, but he also received $460,411 in perks and benefits, according to a Securities and Exchange Commission filing. - Maria Woehr April 30, 2009: AIG's American International Underwriters Holdings, or AIU Holdings -- the property and casualty division -- may go public in the second quarter of 2010 and rename itself or might be sold. - Maria Woehr April 30, 2009: While ailing insurer AIG struggles to sell some assets at better-than-basement prices, it shouldn't have any problems with property/casualty reinsurer Transatlantic Holdings Inc., which posted another quarterly profit. Transatlantic on April 30 announced net income of $75.2 million for the period ended March 31, compared with $115.7 million for the year-ago period. - Michael Rudnick April 29, 2009: Farmers Group Inc., having announced earlier this month that it will buy the 21st Century Insurance Group from AIG for $2 billion, quickly followed up with an internal communications campaign that among other things involved sending 50 execs to 32 metro areas to speak directly to 15,000 agents. - Kenneth Klee April 28, 2009: Five private equity firms are vying for AIG's plum aircraft leasing business, International Lease Finance Corp., sources confirmed. Two groups -- Thomas H. Lee Partners and Carlyle Group, and Greenbriar Equity Group LLC with Onex Corp. -- are participating in second-round bids, according to sources. Another source said London's Terra Firma Capital Partners Ltd., which submitted a bid, is acting alone, possibly with the participation of its AWAS aircraft leasing group.Sources said bids on ILFC's equity are all below $5 billion. One source said the bids are in the $3 billion to $4 billion range. - Michael Rudnick and David Carey April 22, 2009: AIG has agreed to sell its car insurance unit, 21st Century Insurance Group, to Farmers Group Inc. for $1.9 billion. Also April 22 AIG announced that it would accelerate the separation of its global property and casualty insurance businesses from the parent company as part of an effort to restructure itself and rebrand its more profitable divisions.- Michael Rudnick April 21, 2009: AIG announced plans April 21 to transfer its AIU Holdings business into a special purpose vehicle as part of a previously announced restructuring plan to potentially spin off a minority stake in the new holding company to the public over the next nine to 15 months. - Michael Rudnick
April 20, 2009: AIG said in a regulatory filing on April 20 that the
Treasury
Department has agreed to provide the company with up to $29.84 billion
in additional funds for five years under a securities purchase pact. - Donna Block April 16, 2008: AIG announced April 16 it had completed the sale of AIG Private Bank Ltd. for $254 million, plus the assumption of $55 million of intra-company loans to Abu Dhabi investment company Aabar Investments PJSC, an affiliate of International Petroleum Investment Co. - Michael Rudnick April 16, 2009: The chairman of the House Oversight Committee, Rep. Edolphus Towns, D-N.Y., wants to probe the insurer about interactions with P.R. contacts to find out if AIG used part of the government's $182.5 billion bailout for discrediting the insurer's former CEO and shareholder Hank Greenberg. - Maria WoehrApril 13, 2009: AIG Financial Products interim chief operating officer Gerry Pasciucco told The Wall Street Journal on April 13 that 20 of AIG FP's 370 employees quit amid the controversy over bonus payments at the very business unit that toppled the insurer due to the sale of credit default swaps and nearly brought the global financial system to its knees. Congress has pushed to tax recipients of AIG's $165 million bonus program 90% on their bounty. However, the legality of such an employment-contract-breaking measure was questioned by President Obama and has since stalled in Congress. In addition to facing a possible massive tax clawback, AIG bonus recipients have felt the wrath of New York Attorney General Andrew Cuomo, who holds the list of all AIG employees who received bonuses and is investigating whether AIG paid them fraudulently under New York law. As Cuomo dangled the bonus list, some AIG employees had received written death threats from a seething public. - Michael Rudnick April 8, 2009: AIG has asked the Federal Reserve for a $5 billion credit line to help facilitate the sale of its aircraft leasing business, International Lease Finance Corp., as reported late April 7 by the Financial Times, citing people close to the situation. - Michael Rudnick April 7, 2009: It looks like the
auction of AIG's asset management business, AIG
Investments, is heating up. Bids for the business are anywhere
between $400 million and $800 million for the $100 billion portfolio in the
division that manages assets for pension funds, insurance companies and wealthy
individuals, said a source close to the situation. Bidders include Ashmore
Investment Management, Hellman & Friedman LLC, Rhone Group and TA Associates
as well as mutual fund manager Franklin
Templeton and asset manager Southgate
Alternative Investments, according to The Wall Street
Journal. - Maria Woehr April 7, 2009: TARP cop Neil Barofsky launched an
investigation into the insurer's tendency to pay a premium to get out of its CDS
contracts. Bloomberg reports
that the audit was revealed in a April 3 letter from the special inspector
general for the Troubled Asset Relief Program written to Rep. Elijah Cummings,
D-Md. - George White March 30, 2009: Much of Wall Street is forecasting a profitable first quarter of 2009,
which is quite a feat in the midst of the worst financial crisis of the
last 80 years. According to Zero Hedge
a significant amount of that profit is coming from AIG's rush to unwind its massive credit default
swap positions. After already shelling over $75 billion
to Goldman, Sachs & Co., Merrill Lynch & Co., Morgan Stanley,
Bank of America Corp., France's Société Générale SA, Germany's Deutsche
Bank AG and Britain's Barclays plc, it's good to know that AIG remains
everyone's favorite counterparty. - George White March 27, 2009: Private equity firms Clayton, Dubilier & Rice Inc. and Warburg Pincus have dropped out of the bidding for AIG's Advisor Group division, leaving GTCR Golder Rauner LLC and several new bidders.- Michael Rudnick March 26, 2009: AIG
has named Rodney Martin Jr. chairman of its International Life and
Retirement Services division. Martin will oversee American
International Assurance Co. Ltd, or. AIA, American Life Insurance Co. or Alico, AIG Star Life Insurance Co. Ltd., AIG Edison Life Insurance Co. and Nan Shan Life Insurance Co. Ltd. Martin has been with New York-based AIG since 1995 and was executive vice president and chairman and CEO of Alico and AIG's Worldwide Life Insurance. - Michael Rudnick March 26, 2009: AIG's Financial Products unit employee Jake DeSantis, who publicly resigned in a The New York Times op-ed column, is not the only AIG employee stepping forward to publicly resign over CEO Edward Liddy's plea and the U.S. government's demand to return $218 million in bonuses. Many employees are resigning because they feel they are being "blackmailed" and have no other choice. Gerry Pasciucco and about five employees of the unit publicly quit March 25, according to The Wall Street Journal. Another 20 quit March 24, according to The New York Times. - Maria Woehr March 25, 2009: For the past two weeks, the roar of the media, the government and
the American public against AIG for rewarding $165 million in bonuses has been heard loud
and clear. But to hear the other side -- besides AIG's CEO Edward
Liddy's congressional testimony -- has been uncommon. The New York Times reveals one perspective through the resignation
letter addressed to Liddy from Jake DeSantis, an executive vice
president of the AIG Financial Products unit that is at the center of
the controversy. - Gerald Magpily March 25, 2009: Word is that AIG's aircraft leasing unit could get bids from three private equity groups. Thomas H. Lee Partners, Carlyle Group, and Greenbriar Equity Group LLC partnering with Onex Corp. could all bid for International Lease Finance Corp., or ILFC, in the auction's second round in April, according to a Reuters article. - Maria Woehr March 24, 2009: Working for a company named AIG may be tough with the masses not only protesting outside
offices, but accosting staff at their homes too. So, the company gave
its employees a break by removing the stained insurer's name and logo
from the front entrance at its 175 Water St. location in downtown
Manhattan. The sign removal was part of the changing of the name of
AIG's property-casualty arm to AIU Holdings Ltd. - Gerald Magpily March 24, 2009: Many of the employees at AIG's
Financial Products unit who received part of the $165 million in
retention bonuses have returned them ... and then left the company. New
York Attorney General Andrew Cuomo said in several reports that 15 of
the top 20 recipients agreed to give back their bonuses worth about $30
million in cash. Overall, AIG employees have returned about $50 million
in bonuses so far. - Maria Woehr March 23, 2009: At this point with all the scandals and billions lost, AIG is in need of a new identity,
possibly a new name to give people a fresh perspective on the company.
Such a move isn't without precedent. For example, cigarette maker Philip Morris Cos. changed its name to
Altria Group Inc. a few years ago. Nobody at the company
wanted to say it, but one explanation floating around in the media was
to disassociate itself with the stigma of selling cancer-causing
cigarettes. Then there was WorldCom, which was rocked by an accounting scandal
that forced it into bankruptcy and led to a criminal conviction of its
founder Bernie Ebbers. Upon exiting bankruptcy, the reorganized company
adopted the old MCI name before it ultimately was bought by Verizon
Communications Inc., which itself is a 21st century rename
for an amalgamation of old Baby Bells. - Maria Woehr March 23, 2009: A top White House economic adviser Sunday
suggested that President Obama might refuse to sign legislation that
would largely confiscate bonuses paid this year to employees of AIG and other companies that have accepted large amounts of federal bailout funds. The House March 20 approved a 90% tax on bonuses paid this year to AIG
employees and workers at other firms participating in the federal
government's efforts to shore up the financial system. Similar
legislation introduced in the Senate late March 20 would place a 70%
total tax on the bonuses, consisting of a 35% excise tax on companies
paying bonuses and a 35% tax on employees receiving them. - Bill McConnell March 20, 2009: AIG could be making its way back into
the penny stock range as its shares sunk 36 cents, or 22.22%, on March 20 to
close at $1.26 per share. If Uncle Sam, which has warrants to be about
78% of AIG's shares, was a smart investor, it would be doing everything
in its power to boost the ailing insurer's value. However, the House of
Representatives on March 19 voted to impose a 90% tax on the payouts by
AIG and other companies that get large amounts of taxpayer rescue
funds. According to reports, some analysts said this type of legislation
could destroy the competitiveness of the very financial institutions
they are trying to rescue. - Michael Rudnick March 20, 2009: AIG's employees are going to have an interesting weekend. There are already reports that 463 executives along with other employees are being harassed by neighbors and members of their community to return the $165 million in bonuses awarded. AIG CEO Edward Liddy asked the employees that received the bonuses to return them. Meanwhile, the insurer's corporate security cautioned employees "to increase their overall safety and security," avoid wearing name badges and avoid wearing any AIG apparel. - Maria Woehr March 20, 2009: The blowup over bonuses paid to the traders in AIG's discredited financial products arm required company chairman Edward Liddy
to explain to Congress last week how recklessness, poor judgment and
flimsy oversight conspired to crash the insurance conglomerate and
almost dragged the global economy down with it. Liddy's sordid chronology made it clear that no regulator had a
sufficient bird's-eye view over AIG, as the London-based unit built a
book of business in mortgage-based credit default swaps more than twice
the size of the company's net worth. That line of business would leave
the firm vulnerable to billions of dollars in collateral calls when the
housing market got even the slightest bit shaky. - March 19, 2009: Evidently the public isn't dealing with its anger over AIG's compensation plans in a cool and calm manner, as the Connecticut offices of AIG Financial Products are besieged with threats by e-mail and telephone, while outside armed guards keep the wolves at bay.The exposure of three top earners from the division by the New York Post earlier likely has those staffers ignoring the ringing phone or staying with friends until things calm down. - George White March 19, 2009: The nation is outraged over AIG, not only for the bonuses but also for pass-through
bailout funds to counterparties.The larger point here is that we don't seem to know -- either about the
nature of the CDS book or about the systemic effect of an AIG failure
or bankruptcy. The fact is, if we truly understood the situation, then
the trader's option would be moot. But we clearly do not. AIGFP
continues to be characterized as a black box ruled by the traders. This
raises three possibilities. First, we (including Treasury) are being
fooled by the lethality of AIGFP and, by extension, AIG. Who wants to
test it? Second, the CDS book is so complex that no one can untangle
it. Third, traders at AIGFP possess an insight, born of creating the
book in the first place, that makes them irreplaceable. Only in the
third case does paying the bonuses makes sense. But even that comes
with a caveat: If these guys can figure it out, why hasn't the
government over the past six months of ownership camped out in London
and modeled the damn book and gained a greater sense of certainty about
its dynamics? Why over this length of time do the traders remain
irreplaceable? - Robert Teitelman March 19, 2009: It appears that AIG is so
intertwined in the financial system that the administration has to prop
it up in spite of how unpopular it is. But can the same be said for Treasury Secretary Tim Geithner? The uproar over AIG shelling
out retention bonuses to its financial products unit doesn't seem
likely to die down anytime soon and has driven public approval for
government bailouts from poor to dismal. The populist backlash already
has some in Congress calling for heads to roll, and Geithner, who
was instrumental in all the bailouts beginning with Bear Stearns Cos. a
year ago, is looking like the perfect fall guy. - George White March 18, 2008: AIG's CEO Edward Liddy endured his trial by fire before a House subcommittee March 18 over the issue of the millions in bonuses paid to the company's derivatives unit. With anger at the company raging, Liddy was wise enough to come to Congress with some concessions designed to quell public anger with AIG. Specifically, Liddy said that the company was requesting that recipients of money in AIG Financial Products return 50% of the funds and went on to say that some members of the division had already returned 100% of the retention pay. - George White March 18, 2009: After enduring a barrage of invective from
Capitol Hill, Treasury Secretary Timothy Geithner told the top House
lawmaker March 17 that the Obama administration is taking steps to
recoup $165 million in bonuses paid to employees. In addition, the Treasury will deduct the bonus amount from the recent $30 billion in assistance. - Bill McConnell March 18, 2009: Edward Liddy uses the pages of Wednesday's Washington Post
to join
the public's outrage over the retention bonuses paid to employees of AIG's Global Economy Destruction unit. The insurer's CEO
insists that he is as angry as everyone else about the payments. - Jeffrey
Kanige March 17, 2009: AIG has apparently started
layoffs and budgeted $57 million in "retention" pay for employees
expected to be terminated, according to news reports. - Maria Woehr March 17, 2009: Republican Sen. Chuck Grassley's suggests that AIG's brass commit suicide for accepting the $165 million in bonus money. - George White March 16, 2009: AIG
said it used most of the first $85 billion it received from
the U.S. government to pay a host of domestic and foreign banks and
some U.S. municipalities. As various media have reported, the giant insurer, now 80% owned by the
U.S. government, used much of the $173.3 billion it received in federal
aid to pay its trading partners and municipalities. Responding to congressional requests for transparency, AIG revealed
over the weekend that banks that acted as its counterparties in credit
default swap trades received a total of $43.7 billion from the bailout
funds. The list of banks
includes foreign and U.S. Institutions such as Barclays plc, Deutsche
Bank AG, BNP Paribas SA, Goldman Sachs Group Inc. and Bank of
America Corp., to name the top five, in order. - Vipal Monga and Peter Moreira March 12, 2009: Ameriprise Financial Services Inc. has dropped out of the race for AIG's Advisor Group division, according to a source close to the situation. As of last week, Ameriprise, along with private equity firms Clayton, Dublier & Rice Inc., GTCR Golder Rauner LLC and Warburg Pincus, were expected to submit final bids at the end of March, as earlier reported by The Deal. - Michael Rudnick March 9, 2009: The U.K.'s Prudential plc is no longer bidding for AIG's Asian business. The
London insurer had been considered a front-runner in the race to
acquire American International Assurance Co. Ltd., or AIA, and its
departure follows soon after the withdrawal of state-backed China Life Insurance Co. Ltd. from the auction. Both Prudential and Canada's Manulife Financial Corp. submitted bids last week for AIA, but their offers came in far short of AIG's target of at least $20 billion, reports said. - Neil Sen March 6, 2006: So what does Leo Strine think of Maurice "Hank" Greenberg and his henchmen at AIG?
"The complaint fairly supports the assertion that AIG's inner circle
led a -- and I use this term with knowledge of its strength -- criminal
organization," the Delaware Court of Chancery vice chancellor wrote in
the middle of a 105-page opinion issued Feb. 10, in which he declined
to dismiss a suit by AIG shareholders against the company, Greenberg
and several of the senior managers who served under him. - David Marcus March 5, 2009: AIG suspended talks with bidders for its foreign life insurance unit, American Life Insurance Co., or Alico. The news comes days after the U.S. Treasury Department and Federal Reserve Board unveiled their third bailout of AIG,
injecting an additional $30 billion into the insurer and taking direct
control of AIA and Alico. AIG, which has received $180 billion in
government aid in six months, on March 2 posted a record loss of $61.7
billion in the fourth quarter of 2008. - Peter Moreira March 4, 2009: AIG is apparently suspending the sale of its American Life Insurance unit, or Alico, and is instead
considering taking it public next year. AIG received preliminary
offers for its Asian unit, and the offers were
apparently falling short. At the same time politicians are ratcheting up the pressure on the company and the
Federal Reserve to reveal the identities of the counterparties being
made whole by the insurer's three bailouts. AIG also said it would retain its
Philamlife unit. - Maria Woehr and George White March 3, 2009: In his testimony before the Senate Budget Committee March 3, Federal
Reserve Chairman Ben Bernanke showed his frustration with the numerous AIG bailouts, saying the
rescue of AIG has made him more angry than any other rescue. Bernanke said AIG's financial service unit was basically a hedge
fund operating in a traditional insurance company. He said they had no
choice but to step in to rescue AIG to stabilize the system. Some analysts believe that it will take at least another $60 billion to
stabilize AIG. In fact the
insurer even said more money may be necessary after March 2's latest government deal. - Donna Block and Maria Woehr
March 2, 2009: AIG's
new bailout plan -- for $30 billion in additional aid money amid $61.7
billion in fourth-quarter losses -- may be banking on diminishing
expectations. Under the revised plan, the Federal Reserve Bank of New York
is taking stakes in the insurer's sizable Asian life insurance
subsidiaries, allowing the embattled New York insurer to reduce the $38
billion it owes the government by up to $26 billion. But it may not
take into account any decline in value from potential customer
attrition and employee loss. The government said it planned to reduce AIG's $60 billion credit facility in return for preferred shares in American Life Insurance Co., or Alico,
and American International Assurance Co. Ltd. AIG said it is continuing
to review options for these businesses, which could include a public
offering of shares. In an SEC filing late March 2, the giant insurer said that a downgrade
by the ratings agencies would result in AIG having to pay $8 billion in
collateral and termination payments to counterparties, thereby
rendering it insolvent without more cash from the government or other
sources. - Michael Rudnick and George White March 2, 2009: While promising on Bloomberg Television March 2 that every penny of the $180 billion
in government funds would be paid back, AIG CEO Edward Liddy laid the blame for the company's dismal condition
squarely at the feet of Hank Greenberg, the man who built AIG
into the world's largest insurer. - George White Feb. 25, 2009: The auction for AIG's
Asian operations is reportedly not as heated as the troubled insurance
giant had hoped, with the weak economy causing some potential buyers to
think twice. Three potential buyers remain interested in
American International Assurance Co., according to Reuters, with bids
due Feb. 27. The report lists Prudential plc of the U.K., Manulife Financial Corp. of Canada and Singapore sovereign wealth fund Temasek Holdings Pte. Ltd. as the parties considering offers for a stake in the unit. But a number of other prospective bidders, including HSBC Holdings plc, Bank of China Ltd. and AXA SA, have abandoned the process. - Lou Whiteman Feb. 24, 2009: AIG is talking to the U.S. government about a new rescue package that could be announced as early as next week. The Financial Times reported Feb. 24 that New York-based AIG,
which is already 80% owned by the government, is in negotiations to
obtain fresh capital as a buffer to expected fourth-quarter 2008 losses
and to allow more time to sell units. - Peter Moreira Feb 20, 2009: Prudential Financial Inc. is apparently in the lead to buy
AIG Edison Life Insurance Co. and AIG Star Life Insurance, two Japanese
life insurers, for between $1.1 billion and $2.1 billion, according to Reuters. London life insurer Prudential plc said it would transfer the assets and most of the liabilities of its Taiwanese agency business to Taiwan's China Life Insurance Co. Ltd. for a nominal sum of 1 new Taiwan dollar (3 cents). Prudential
will in turn pay £45 million ($64.4 million) for new stock in China
Life, giving it close to a 10% stake. The transaction with China Life
will increase Prudential's capital surplus by £800 million. - Laura Board Feb. 19, 2009: Bidders for its Philamlife unit have until Feb. 23 to submit their
bids, and the sale, which is expected to net $4 billion, could be
announced the first week of March, according to Reuters. The four
potential buyers for the Philippine life insurance business are the Bank of the Philippine Islands, Banco de Oro
Unibank, Manulife Financial Corp. and an unidentified
foreign investor. - Maria Woehr Feb. 13, 2009: AIG is hocking its Japanese headquarters to pay off a $60 billion loan from the U.S. Federal Reserve. - Michael Rudnick Feb. 12, 2009: It appears that Bank of China Ltd. isn't bidding for American International Assurance, although it was cited as the preferred bidder heading into the process in reports by Dow Jones and the Financial Times. - Maria Woehr Feb. 11, 2009: AIG is in talks to sell its U.S. auto insurance division, 21st Century Insurance Group, to Swiss insurer Zurich Financial Services Group. - Michael Rudnick Feb. 6, 2009: AIG
is close to a deal to sell its three broker-dealers to a private
equity firm, an executive of one of the units told its affiliates
Friday. It could be the first large asset sale by the troubled insurer,
which the federal government now controls. - John E. Morris Feb. 5, 2009: The insurer said that it has signed
a $535.7 million deal to sell its Bangkok-based banking and credit card
businesses, AIG Retail Bank Co. Ltd. and AIG Card (Thailand) Co. Ltd.,
to a local commercial bank, Bank of Ayudha Public Co. Ltd. Bank of
Ayudha will pay $58.7 million in cash and $477 million to cover
intercompany loans tied to the businesses. - Michael Rudnick Feb. 5, 2009: Former AIG CEO Hank Greenberg, the CEO of C.V. Starr, said in an
interview with CNBC that AIG "is more than a troubled company" and has
"lost its way" after the AIG's shares hit all time low. - Maria Woehr Feb. 2, 2009: AIG faces major hurdles in divesting aircraft lessor International Lease Finance Corp.: its enormous size and gargantuan debt. The
Century City, Calif., subsidiary holds $33 billion in debt, as of the
third quarter ended Sept. 30, that may be prohibitive to a sale amid
virtually frozen financing markets. - Michael Rudnick Jan. 30, 2009: AIG's new vice chairman and restructuring
chief, told Bloomberg that AIG may consider preparing some of
its business units for initial public offerings. - Michael Rudnick Jan. 26, 2009: Continuing its massive divestment program, AIG said Jan. 26 that its
AIG Global Real Estate unit is putting its fund management business up for
sale. The fund management business
operates 15 fund programs with over $12.4 billion in assets under
management and $5.2 billion in equity capital commitments as of Sept.
30. - Donna Block Jan. 23, 2009: AIG Europe said it raised €680 million ($877 million) in cash by selling
subordinated debt. The
Paris-based unit of AIG also said it is not for sale as part of its parent's asset sales. Also, AIG's chief investment
officer Win Neuger will step down. - Michael Rudnick Jan. 20, 2009: Zurich's UBS said it would pay $15 million up-front and up to $135 million -- depending on the target's earnings -- over the next 18 months for AIG's commodity index business including AIG's rights to the Dow Jones-AIG Commodity Index. - Andrew Bulkeley Jan. 16, 2009: AIG's Philippine American Life and General Insurance Co., known as Philamlife, seems to be one of the ailing insurer's most attractive assets, as numerous media reports in recent months have pointed to more than half a dozen potential buyers for the business. The latest: Philippine conglomerate SM Investment Corp., said Jan. 16 that it has started the due diligence review of Philamlife, according to Dow Jones Newswires. Teresita Sy, vice chairman of SM Investments, told Dow Jones and other reporters at a local event that she expects AIG to name the winning bidder within the first quarter. - Michael Rudnick Jan. 13, 2009: Canada's fourth-largest bank, BMO Financial Group, purchased AIG Life of Canada, which sells insurance and retirement savings products, for about C$375 million ($308 million). - Maria Woehr Jan 9, 2009: AIG will keep hordes of lawyers and bankers busy as it sells most of its assets in an effort to pay back the $150 billion or so the U.S. government has loaned it since September. Many of those advisers will come from Sullivan & Cromwell LLP, the company's longtime outside counsel, which advised AIG on the $746 million sale of equipment insurer HSB Group Inc. to Munich Re AG in a deal announced Dec. 22. - Vipal Monga Jan. 8, 2009: Seven senior executives at AIG won't be getting that $3 million in deferred compensation they were expecting to be paid by April. An SEC filing said that on Dec. 31, 2008, "AIG determined instead to distribute account balances only to current agents and employees (excluding former employees and agents), and to exclude current executive officers from such distributions." Meaning the 4,000 employees that took part in the retirement plans will be paid at a later date. The participants in total are due about $273.5 million. - Maria Woehr Jan. 6, 2009: Former AIG CEO Maurice "Hank" Greenberg wants the board of directors to explain its sale process after it apparently sold off an asset at a "fire sale" price in an effort to repay a $152.5 billion loan from the U.S. government. - Maria Woehr December 24, 2008: AIG said Dec. 24 that a financing entity it created jointly with the Federal Reserve Bank of New York
has bought $16 billion in multisector collateralized debt obligations
from counterparties that had purchased credit default swaps from the
insurer. The credit default swap contracts written by AIG's
Financial Products Corp. division that covered these CDOs in the case
of default have been terminated. The CDO purchase was funded by a net
payment of $6.7 billion and the surrender of about $9.2 billion in
collateral previously posted to CDS counterparties by AIGFP. To date, AIG has purchased $62 billion in CDOs from its CDS
counterparties. - Michael Rudnick Dec. 23, 2008: Former AIG chief executive Hank
Greenberg sees the government takeover of the New York-based insurer to
be the cause of its demise. Greenberg on CNBC Tuesday said the
government's solution of essentially buying 80% of AIG was too extreme
and would force his former company to liquidate the company's assets. - Gerald Magpily Dec. 22, 2008: German reinsurer Munich Re AG Dec. 22 agreed to take equipment insurer HSB Group Inc. from AIG as the New York group raises funds to repay a massive government bailout. Munich
Re, which takes its name from its southern German home town, said it
would pay $742 million for HSB and absorb $76 million in debt from the
target, parent of Hartford Steam Boiler Inspection and Insurance Co. - Andrew Bulkeley Dec. 16, 2008: AIG has sold $39.3 billion of residential mortgage-backed securities assets to Maiden Lane II LLC, a fund established by the Federal Reserve Bank of New York. - Maria Woehr Dec. 11, 2008: In a speech in Hong Kong Dec. 11, AIG's CEO Edward Liddy said he was
meeting with potential bidders in January, but that the pace and the
order of the asset sales may vary and could take months or longer to
complete. Liddy was addressing reports that said AIG would sell assets by the end of the year. - Maria Woehr Dec. 9, 2008: AIG could soon announce more asset sales. It looks like AIG will be selling more assets off soon so that it can start paying off its $150 billion government bailout. AIG made its first asset sale Dec. 1, agreeing to sell a Swiss private bank to Aabar Investments PJSC for Sfr407 million ($336 million). AIG also sold its interest in natural gas marketer Tenaska Marketing Ventures, Tenaska Gas Storage and Tenaska Marketing Canada to Tenaska Inc. for an undisclosed amount in a sale expected to close on Jan. 2. So what might be next? - Maria Woehr Dec. 3, 2008: AIG to enter round three in the bailout battle: With its first two bailouts coming as blockbuster hits, AIG 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. - George White Nov. 25, 2008: There's lots of interest in AIG's Asian life insurance assets; AIG freezes management salaries, pays CEO $1 a year. This, after AIG execs won't get bonuses and the company altered its executive payout plans. Meanwhile, assets sales progress, and bidders line up. Earlier in the month, Aflac ducked out. Nov. 10, 2008: Treasury's exposure to AIG now $150B: AIG has agreed to revise its bailout package to boost its equity, lengthen the terms of loans and increase taxpayers' exposure to what was once the world's biggest insurer. The New York company said in its third-quarter earnings statement Nov. 10 that the government will buy an additional $40 billion of AIG preferred stock and warrants through the U.S. Treasury's Troubled Asset Relief Program, or TARP. - Peter Moreira Nov. 7, 2008: Asset sales may happen before year's end; Oct. 24: New AIG execs have big task of paying back mammoth bailout of buying AIG assets. ASSET GRAB BEGINS, GREENBERG WANTS IN As AIG's asset grab began, former chief Hank Greenberg was trying to get in on the auction. As Lehman Brothers Holding Inc. filed for Chapter 11 and as Bank of America Corp. grabbed Merrill Lynch & Co. with a $50 billion deal, AIG became arguably the most worried-about financial institution. The Federal Reserve jumped in Sept. 16 with an $85 billion loan for the insurer, taking a 79.9% equity stake in exchange. Edward Liddy, the former Allstate Corp. CEO and an operating partner with Clayton, Dubilier & Rice Inc., took over, but only as an interim CEO, according to the PE firm. The news comes just a day after the New York Fed jumped in Sept. 15, agreeing to bend the rules to give AIG access to $20 billion of its own capital. But the three major rating agencies also downgraded AIG, further clouding its outlook. Ahead of the bailout, Greenberg was among several investors possibly contemplating a deal for the insurer. He also called it a "national treasure," while then-Republican presidential nominee Sen. John McCain said "let it fail" and then-Democratic vice presidential candidate Sen. Joe Biden pointed out you can't bail out all "failing financial institutions." How did it get here, anyway? Staggering losses on exposure to mortgage-related securities hit AIG's earnings, leading to ratings downgrades and a management upheaval. These events, coupled with a hedge fund and PE slowdown and eroding investor confidence, combined to lead the company's stock value to decline more than 90% this year. Sept. 15, 2008: New York State extends a helping hand to AIG The plan allows AIG to move funds from its insurance subsidiaries to the parent company and will likely stave off a ratings downgrade. AIG had worked with New York officials through the shore up capital after rating agencies threatened downgrades. New York Governor David Paterson said the state stepped in to help avoid job losses, as AIG employs 6,000 people in Manhattan and 8,600 statewide. He said the plan was designed to pose no risk to New York's taxpayers. - George White Meanwhile, The Wall Street Journal reported the Federal Reserve asked Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. to assist in making up to $75 billion in loans available to AIG. Sept. 15 2008,: U.S. financial landscape shifts Earlier in the day, AIG was said to be seeking $40 billion in capital to avoid a ratings downgrade and has been in talks with JC Flowers & Co. LLC, Kohlberg Kravis Roberts & Co. and TPG Capital. The company's share price had fallen 66% to $4.13 by early Monday afternoon on news reports that the insurer was seeking support from the Federal Reserve and is in rescue talks with billionaire Warren Buffett. AIG's stock has now lost more than 90% of its value this year. The financial titan is seeking a $40 billion bridge loan from the Fed, though it isn't clear whether the central bank will grant the request, The New York Times reported. Other press reports said Buffett, chairman of Berkshire Hathaway Inc., is in rescue talks with AIG. "We believe that AIG has sufficient capital and liquidity to meet its policy obligations and potential collateral requirements, which are significantly greater than the expected cash losses on the mortgage-related assets," Standard & Poor's credit analyst Rodney Clark said. The ratings agency had announced that it was putting AIG on CreditWatch for a possible downgrade. "However, additional market value losses will place some strain on the company's resources," Clark said. - Vipal Monga and Peter Moreira See also: AIG in discussions with PE firms, seeks Fed help. Sept. 13, 2008: Government, Wall Street CEOs in emergency talks Top government officials and the chiefs of the world's top banks held their second day of emergency meetings Sept. 13. The Wall Street Journal reported Sept. 13 that Morgan Stanley chief executive John Mack, Merrill Lynch chief executive John Thain, J.P. Morgan Chase CEO Jamie Dimon, Goldman Sachs Group Inc. CEO Lloyd Blankfein, Citigroup Inc. head Vikram Pandit and representatives from the Royal Bank of Scotland Group plc and Bank of New York Mellon Corp. were at the meeting, along with Credit Suisse CEO Brady Dougan, Morgan Stanley chief financial officer Colm Kelleher, Citigroup chief financial officer Gary Crittenden, UBS chief risk officer Thomas Daula, J.P. Morgan investment bank co-head Steve Black and Goldman Sachs co-president Gary Cohn. Although it appeared as if the talks were centered mainly on finding a way to
either sell Lehman or liquidate the bank without causing major market
disruptions, press reports suggested that the talks had widened to
include discussions of other embattled financial services companies, Washington
Mutual Inc. and AIG, both of whom have also seen their stock prices erode amid a
deterioration in market confidence and continuing troubles related to the
housing market and mortgage-backed securities. - Vipal Monga A ROUGH FEW MONTHS: STEEP LOSSES, ACTIVIST SHAREHOLDERS, CEO OUSTER, RATINGS DOWNGRADES July 31, 2007: Hedge Fund and PE slowdown expected to hit AIG's earnings At the end of July, Bloomberg reported that AIG's "earning from so-called alternative holdings were probably close to zero in the second quarter, after soaring 77% to $1.02 billion a year earlier, said Citigroup Inc. analyst Joshua Shanker." The news service said that insurers increased their private equity and hedge fund assets by 48% to $49.8 billion in 2007, according to the National Association of Insurance Commissioners. But the credit crunch has cut off the once lucrative flow of money to insurers. - G.W. June 16, 2007: AIG names Willumstad CEO Back in June, Robert Willumstad, the former Citigroup Inc. heavyweight who left the world's biggest bank when denied the CEO job, was named CEO of AIG, adding to his role as chairman. New York-based AIG announced June 15 that its board had ousted chief executive Martin Sullivan and that Willumstad would replace him. Willumstad had been named chairman at the insurance giant in September 2006, shortly after he left Citigroup. In recent months, the AIG board was known to be getting impatient with Sullivan, 53, because of consistent underestimates of the company's exposure to mortgage-related securities. In May, AIG reported a first-quarter loss of $7.8 billion after writing down the market value of the AIG Financial Product's derivatives portfolio by $9.11 billion. It was its second record quarterly loss in a row. - P.M. June 12, 2007: Report: AIG holders seek board and management changes The shakeup news came days after a powerful trio of AIG shareholders including a former director of the insurer, Eli Broad, Legg Mason Capital Management fund manager Bill Miller and Shelby Davis, founder of Davis Advisors, are urging for change in the ailing insurance company's board and management. - Michael Rudnick May 23, 2007: AIG's credit gets Moody's downgrade; AIG downgrades spell trouble Credit rating agencies Standard & Poor's and Fitch Ratings already downgraded debt ratings on the world's largest insurer, AIG. Now, fellow credit agency Moody's Investor Service joined the downgrade bandwagon, lowering its senior unsecured debt rating on AIG to Aa3 from Aa2 Thursday, based partly on the company's recent announcement of a $7.81 billion first-quarter loss. The downgrade follows AIG's announcement that it was able to raise $20
billion last week to shore
up its reserves from the first-quarter loss. The company said it
would also selectively sell some noncore assets in more high-growth businesses
for additional money, which AIG CEO Martin Sullivan points to as "foreign life
and retirement and its aircraft leasing business." Sullivan wanted to boost
confidence in its aircraft leasing business, International Lease Finance, which
made rumblings of wanting to be sold following S&P's and Fitch's downgrades.
With Moody's now downgrading AIG, the question arises whether International
Lease will continue the push for a possible divestment from its parent. -
Gerald Magpily MODEST DEALMAKING WENT ON Even through the beginning of the year, the dealmaking went on for AIG. Popular Inc., the parent of Puerto Rico's Banco Popular, agreed Jan. 23, 2008 to sell a substantial portion of the assets of its consumer finance unit Equity One to American General Finance Inc., a unit of insurance giant American International Group Inc., for $1.5 billion. - Donna Block AIG said in May 2007 it would acquire
the shares it did not own in 21st Century Insurance Group for about
$813 million, topping its previous offer of $690 million. AIG already owned,
through its subsidiaries, about 60.8% of the outstanding shares of Woodland
Hills, Calif.-based 21st Century. - Donna Block
How did it get here, anyway? Staggering losses on exposure to
mortgage-related securities hit AIG's earnings, leading to ratings
downgrades and a management upheaval. These events, coupled with a
hedge fund and PE slowdown and eroding investor confidence, combined to
lead the company's stock value to decline more than 90% this year.
Sept. 15: New York State extends a helping hand to AIG The plan allows AIG to move funds from its insurance subsidiaries to the parent company; and will likely stave off a ratings downgrade. AIG had worked with New York officials through the weekend to shore up capital after rating agencies threatened downgrades. New York Governor David Paterson said the state stepped in to help avoid job losses, as AIG employs 6,000 people in Manhattan and 8,600 statewide. He said the plan was designed to pose no risk to New York's taxpayers. - George White Meanwhile, the Wall Street Journal reported the Federal Reserve asked Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. to assist in making up to $75 billion in loans available to AIG. Sept. 15: U.S. financial landscape shifts Earlier in the day, AIG was said to be seeking $40 billion in capital to avoid a ratings downgrade and has been in talks with J.C. Flowers & Co. LLC, Kohlberg Kravis Roberts & Co. and TPG Capital. The company's share price had fallen 66% to $4.13 by early Monday afternoon on news reports that the insurer was seeking support from the Federal Reserve and is in rescue talks with billionaire Warren Buffett. AIG's stock has now lost more than 90% of its value this year. The financial titan is seeking a $40 billion bridge loan from the Fed, though it isn't clear whether the central bank will grant the request, The New York Times reported. Other press reports said Buffett, chairman of Berkshire Hathaway Inc., is in rescue talks with AIG. "We believe that AIG has sufficient capital and liquidity to meet its policy obligations and potential collateral requirements, which are significantly greater than the expected cash losses on the mortgage-related assets," Standard & Poor's credit analyst Rodney Clark said Friday. The ratings agency had announced that it was putting AIG on CreditWatch for a possible downgrade. "However, additional market value losses will place some strain on the company's resources," Clark said. - Vipal Monga and Peter Moreira See also: AIG in discussions with PE firms, seeks Fed help. EMERGENCY TALKS Sept. 13: Government, Wall Street CEOs in emergency talks Top government officials and the chiefs of the world's top banks held their second day of emergency meetings Sept. 13. The Wall Street Journal reported Sept. 13 that Morgan Stanley chief executive John Mack, Merrill Lynch chief executive John Thain, J.P. Morgan Chase CEO Jamie Dimon, Goldman Sachs Group Inc. CEO Lloyd Blankfein, Citigroup Inc.head Vikram Pandit and representatives from the Royal Bank of Scotland Group plc and Bank of New York Mellon Corp. were at the meeting, along with Credit Suisse CEO Brady Dougan, Morgan Stanley chief financial officer Colm Kelleher, Citigroup chief financial officer Gary Crittenden, UBS chief risk Oofficer Thomas Daula, J.P. Morgan investment bank co-head Steve Black and Goldman Sachs co-president Gary Cohn. Although it appeared as if the talks were centered mainly on finding a way to either sell Lehman or liquidate the bank without causing major market disruptions, press reports suggested Saturday that the talks had widened to include discussions of other embattled financial services companies, Washington Mutual Inc. and AIG, both of whom have also seen their stock prices erode amid a deterioration in market confidence and continuing troubles related to the housing market and mortgage-backed securities. - V.M. A ROUGH FEW MONTHS: STEEP LOSSES, ACTIVIST SHAREHOLDERS, CEO OUSTER, RATINGS DOWNGRADES July 31: Hedge Fund and PE slowdown expected to hit AIG's earnings At the end of July, Bloomberg reported that AIG's "earning from so-called alternative holdings were probably close to zero in the second quarter, after soaring 77% to $1.02 billion a year earlier, said Citigroup Inc. analyst Joshua Shanker." The news service said that insurers increased their private equity and hedge fund assets by 48% to $49.8 billion in 2007, according to the National Association of Insurance Commissioners. But the credit crunch has cut off the once lucrative flow of money to insurers. - G.W. June 16: AIG names Willumstad CEO Back in June, Robert Willumstad, the former Citigroup Inc. heavyweight who left the world's biggest bank when denied the CEO job, was named CEO of AIG, adding to his role as chairman. New York-based AIG announced June 15 that its board had ousted chief executive Martin Sullivan and that Willumstad would replace him. Willumstad had been named chairman at the insurance giant in September 2006, shortly after he left Citigroup. In recent months, the AIG board was known to be getting impatient with Sullivan, 53, because of consistent underestimates of the company's exposure to mortgage-related securities. In May, AIG reported a first-quarter loss of $7.8 billion after writing down the market value of the AIG Financial Product's derivatives portfolio by $9.11 billion. It was its second record quarterly loss in a row. - P.M. June 12: Report: AIG holders seek board and management changes The shakeup news came days after a powerful trio of AIG shareholders including a former director of the insurer, Eli Broad, Legg Mason Capital Management fund manager Bill Miller and Shelby Davis, founder of Davis Advisors, are urging for change in the ailing insurance company's board and management. - Michael Rudnick May 23: AIG's credit gets Moody's downgrade; AIG downgrades spell trouble Credit rating agencies Standard & Poor's and Fitch Ratings already downgraded debt ratings on the world's largest insurer, AIG. Now, fellow credit agency Moody's Investor Service joined the downgrade bandwagon, lowering its senior unsecured debt rating on AIG to Aa3 from Aa2 Thursday, based partly on the company's recent announcement of a $7.81 billion first-quarter loss. The downgrade follows AIG's announcement that it was able to raise $20 billion last week to shore up its reserves from the first-quarter loss. The company said it would also selectively sell some noncore assets in more high-growth businesses for additional money, which AIG CEO Martin Sullivan points to as "foreign life and retirement and its aircraft leasing business." Sullivan wanted to boost confidence in its aircraft leasing business, International Lease Finance, which made rumblings of wanting to be sold following S&P's and Fitch's downgrades. With Moody's now downgrading AIG, the question arises whether International Lease will continue the push for a possible divestment from its parent. - Gerald Magpily MODEST DEALMAKING WENT ON Even through the beginning of the year, the dealmaking went on for AIG. Popular Inc., the parent of Puerto Rico's Banco Popular, agreed Jan. 23, to sell a substantial portion of the assets of its consumer finance unit Equity One to American General Finance Inc., a unit of insurance giant American International Group Inc., for $1.5 billion. - Donna Block AIG said in May 2007 it would acquire the shares it did not own in 21st Century Insurance Group for about $813 million, topping its previous offer of $690 million. AIG already owned, through its subsidiaries, about 60.8% of the outstanding shares of Woodland Hills, Calif.-based 21st Century. - D.B.
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I am the founder and CEO of AccuQuote, a large life insurance brokerage firm. We sell American General life insurance (a subsidiary of AIG) and there have been lots of questions from policy holders. At this time, there is no reason to believe American General’s life insurance policyholders are in danger.