The Federal Reserve has asked two investment banks, JPMorgan Chase and Goldman Sachs, to put together at least $70 billion in loans to help prop up the American International Group, the giant insurance company, a person briefed on the matter told the New York Times.
More specific details of the plan could not be learned, but it appears that the Fed was seeking to create a bank-financed credit line for A.I.G. as it sought to avoid a credit rating downgrade that could help trigger its demise.
A.I.G. had sought a $40 billion bridge loan from the Fed after other efforts to raise capital crumbled. The rising amount of money needed showed how quickly A.I.G.’s fortunes were deteriorating. Just two months ago, the company was telling investors it believed it had adequate capital.
In a planned restructuring of the insurance giant, A.I.G. may put on the market Woodland Hills-based 21st Century Insurance Group — which it acquired only last year — but likely will hang on to Century City aircraft leasing giant International Lease Finance Corp. for tax reasons, sources told the Los Angeles Times.
–
Read the full
New York Times
story.
–
Read the additional coverage in the
Los Angeles Times
story.
