As the CEO of insurance giant AIG was "clarifying" the circumstances surrounding an AIG business retreat last month after the feds bailed out the company, there was news on Wednesday that AIG was getting another line of credit from the US.
The first one in September was worth $85 billion. Add onto that now as much as another $38 billion.
The first time around the federal government got an almost 80% stake in the company. Pretty soon the taxpayers are going to own the whole thing.
I'm not a financial expert, but here's how I can best describe this deal. The New York office of the Federal Reserve will borrow certain investment grade, fixed income securities from AIG in return for cash collateral.
AIG says that will help them provide liquidity for some of their operations, with the securities in the possession of the Fed.
Meanwhile, AIG CEO Edward Liddy sent a letter to the Treasury Secretary on Wednesday trying to do some damage control about Congressional furor over the AIG retreat at a swanky California hotel.
As one of my readers pointed out yesterday in a comment left on my blog, the retreat was not for AIG executives only. Rather there were some execs, but mostly it was independent sales agents who do work for AIG.
In his letter, Liddy said it was wrongly characterized as an "Executive Retreat." He also made the case that the company was reining in spending now that the feds were basically the biggest shareholder.
"AIG is focused on doing what is necessary to address our capital structure, repay the Fed credit facility and emerge as a healthy global insurer. In the meantime, our insurance businesses continue to operate normally and satisfy the needs of our policy holders," wrote Liddy.
The AIG loan was just one of another series of moves on Wednesday by the feds, which began with a cut in interest rates by the Federal Reserve.
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