NEW YORK, Sept. 25 /PRNewswire/ -- American International Group Inc. (NYSE: AIG; A-/Watch Dev/A-1) entered into an unprecedented agreement with the Federal Reserve on Sept. 16, 2008. This agreement has offered the company an $85 billion secured loan facility from the Federal Reserve Bank of New York and has given the U.S. government effective majority ownership in the firm and a secured interest in most of its assets. It also relieved concerns that AIG might have to file for bankruptcy because of liquidity concerns, which could have caused significant damage to the global financial markets. Yesterday, Standard & Poor's Ratings Services published a Credit FAQ, titled "A Look At American International Group After The Fed Action," which provides some answers to the many questions this unusual government step raises about how the plan would work and what its implications might be.
Some of the questions the article answers include: -- What are the conditions of the Fed's $85 billion loan facility? -- Does AIG have $85 billion of assets to sell to repay the loan? -- Is this a liquidation of AIG? -- What are the implications of the government's ownership interest in the firm? -- How did the government likely arrive at $85 billion as the amount offered? -- How did the creation of this facility affect the ratings on AIG and its subsidiaries? -- What is the expected timeframe for resolving the CreditWatch status of the ratings on AIG and its subsidiaries?
The report is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at http://www.ratingsdirect.com/. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail to
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