AIG Still In Trouble, takes another 4.2 billion to keep afloat

[dc dalton]

Can someone just take this thing out behind the shed and put it out of its misery?


YESH!


http://www.bloomberg.com/apps/news?p...cD6D12m8&pos=5

Nov. 6 (Bloomberg) -- American International Group Inc., the insurer rescued by the U.S., tapped the Treasury Department for another $4.2 billion to help restructure its money-losing mortgage guarantor and the plane unit it’s trying to sell.

AIG accessed about $2.1 billion from its Treasury facility on Aug. 13 and told the government today it would draw down another $2.1 billion, the New York-based company said in a regulatory filing. AIG got the $29.8 billion facility in April as part of its fourth bailout.

“It shows that they’re still having trouble getting cash to continue to run their operations” without government support, said Sandler O’Neill Partners LP analyst Paul Newsome. “That’s despite the fact you’ve had some really favorable things happen, like the credit markets getting better.”

AIG was bailed out in September 2008 to prevent losses at banks that bought derivatives from the insurer. The $182.3 billion rescue includes a $60 billion Federal Reserve credit line, up to $52.5 billion to buy mortgage-backed securities owned or backed by the insurer, and a Treasury investment of as much as $69.8 billion in two facilities. AIG has already drained one of the Treasury programs, valued at $40 billion.

AIG is using Treasury funds to buy shares of International Lease Finance Corp. held by one of its insurance units, the company said in the filing. The transfer may ease the eventual sale of Los Angeles-based ILFC or its assets, Newsome said.

Plane Sale

The insurer is in talks to sell as much as $4.5 billion of commercial planes to ILFC’s chief, Steven Udvar-Hazy, who is seeking to start a rival firm, people familiar with the matter said in October. Christina Pretto, a spokeswoman for AIG, declined to comment.

Funds will also be used for “restructuring transactions” at AIG’s United Guaranty mortgage insurer, the company said in the filing. United Guaranty reimburses lenders when borrowers don’t repay and foreclosure fails to cover costs. The Greensboro, North Carolina-based mortgage guarantor named Eric Martinez this year to replaces William Nutt as CEO.

The Treasury facility was initially $30 billion, then was reduced by $165 million, the amount AIG gave in bonuses in March to employees of an unprofitable derivatives unit. AIG first tapped the $29.8 billion facility in May when it accessed about $1.2 billion to shore up its U.S. life insurance operations.

Fed Credit Line

AIG owes $44.5 billion on its Federal Reserve credit line. The figure rose last month as the firm propped up ILFC by extending $2 billion in credit. ILFC turned to AIG to finance contractual obligations after credit downgrades barred the plane unit from borrowing from the U.S. commercial paper program.

The company has agreements to raise more than $12 billion by selling operations including a U.S. auto insurer, an equipment guarantor and a Taiwan life unit. Chief Executive Officer Robert Benmosche is seeking to enhance the value of assets before they are sold “and expects to accomplish this over a longer time frame than originally contemplated,” AIG said today in a statement.

AIG reported $455 million in net income today, its second straight quarterly profit after the U.S. rescue, as investment losses narrowed and catastrophe costs declined.

[buster2209]

So they ask for more money even though they have posted a $455 million profit?

AIG posts profit of 455 million dollars

Published: Friday November 6, 2009

Bailed out insurance giant AIG on Friday announced a profit of 455 million dollars in the third quarter, a massive turnaround from a 24.4 billion dollar loss in the same period last year.

The earnings from group, the largest recipient of US government aid during the financial crisis, were better than expectations.

Excluding special items, the profit was 2.85 dollars per share, compared with a market forecast of 1.98 dollars per share.

It was the second consecutive quarterly profit for American International Group after the prior quarter's earnings of 1.8 billion dollars.

"Our results reflect continued stabilization in performance and market trends," said AIG president and chief executive Robert Benmosche.

"AIG employees are working to preserve the strength of our insurance businesses in a challenging market by working closely with our distribution partners, with third quarter 2009 showing signs of stabilization."

AIG was the largest single recipient of US bailouts with the government pumping more than 170 billion dollars into the firm to keep it afloat and taking a controlling stake in the group in the process.

Once the world's biggest insurer, AIG was on the brink of bankruptcy in September 2008 when the government offered a financial lifeline in exchange for an 80 percent stake in the company.

The company was in trouble after backing trillions of dollars in risky financial products amid a US home mortgage meltdown that triggered a global financial crisis.

The latest quarterly figures showed revenues fell 11.8 percent to 26 billion dollars as AIG sold off some or wound down of its operations.

AIG said it "continues to make progress on its disposition plan," having entered into agreements to sell or completed the sale of operations and assets to generate a total of 5.6 billion dollars.

A government report in September showed AIG still owed nearly 121 billion dollars in taxpayer aid.

The Government Accountability Office, an investigative arm of Congress, said the ultimate success of AIG?s restructuring and repayment efforts remains "uncertain."

Robbing fuckers!!

[jcephl]

No more bailouts! Let the bad companies go out of business. The companies that are competent will benefit. That's capitalism.