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New chief readies plan to reshape AIG; Extent of sale unclear, but company pledges to retain core units.

Publication: Business Insurance
Publication Date: 29-SEP-08 		Format: Online
Delivery: Immediate Online Access
Full Article Title: New chief readies plan to reshape AIG; Extent of sale unclear, but company pledges to retain core units.(News)(American International Group Inc.)

Article Excerpt
Byline: JUDY GREENWALD

NEW YORK-How deeply American International Group Inc.'s asset sales are likely to cut into the insurer's core commercial property/casualty operations remains unclear, though aircraft leasing and other noncore operations are expected to be the first to be sold, observers say.

Under terms announced earlier this month, AIG will be able to tap up to $85 billion from a two-year revolving credit facility provided by the Federal Reserve Board, but must sell assets to repay that loan. The Federal Reserve Board is to receive a 79.9% equity interest in exchange for the loan (see story, page 27).

What AIG ultimately sells will depend on how much units fetch and how much additional capital is needed for its credit default swap portfolio.

Top AIG officials have said the insurer doesn't plan to sell its U.S. and foreign commercial property/ casualty business (BI, Sept. 22).

In a television interview last week, new Chairman and Chief Executive Officer Edward M. Liddy said the New York-based insurer will return to its core of domestic and international commercial insurance and emerge a "very viable, nimble but smaller...

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