American International Group Inc., the insurer bailed out by the U.S., garnered $4.3 billion in bank credit lines in another step toward repaying taxpayers and gaining independence.
The credit, provided by more than 30 banks and administered by JPMorgan Chase & Co., includes two $1.5 billion facilities, one for three years and the other for 364 days, AIG said today in a regulatory filing. AIG’s property-casualty division Chartis Inc. got $1.3 billion, the insurer said. The firm rose $2.01, or 3.7 percent, to $56.34 at 10:03 a.m. New York Stock Exchange composite trading.
AIG, which is seeking to replace government funds with private capital, said Dec. 8 that it struck a deal to repay a $20 billion Federal Reserve Bank of New York credit line and would then turn to stock sales to repay the U.S. Treasury Department. The insurer must demonstrate access to capital markets before the U.S. fully withdraws its support, Treasury Chief Restructuring Officer Jim Millstein has said.
The credit lines are “another important vote of confidence by the market in AIG,” Chief Executive Officer Robert Benmosche said in a separate statement. “We believe we are close enough to completing our recapitalization plan that we can see the finish line.”
The deals are contingent upon the insurer paying down its New York Fed credit line by March 31, the filing said. The New York-based insurer returned to debt markets this month for the first time since its September 2008 rescue, selling $2 billion in bonds. AIG also established a $500 million contingent liquidity facility on Dec. 15, the firm said.
© Copyright 2021 Bloomberg News. All rights reserved.