BREAKING NEWS: NY Governor Patterson Allows AIG to Use Up to $20B in Subsidiary Assets
New York Governor David Patterson announced in a news conference Noon EST that it will allow American International Group Inc (AIG) to use up to $20B in subsidiary assets to shore up its capital.
Paterson asked New York state insurance regulators to essentially allow AIG to provide a bridge loan to itself.
The governor has also asked the head of New York's insurance department to talk with Federal regulators about providing an additional bridge loan to AIG. "AIG still remains financially sound," Paterson said.
The move will allow AIG to use those assets as collateral to borrow cash to fund its day-to-day operations, Paterson explained.
The stock was down 55% earlier this morning after the insurer announced it had turned to the Federal Reserve for $40 billion in bridge financing to ward off a liquidity crisis and ratings downgrades.
Published on September 15, 2008
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