The Revolving Credit Facility will be reduced in exchange for preferred interests in two special purpose vehicles created to hold all of the outstanding common stock of American Life Insurance Company (ALICO) and American International Assurance Company Ltd. (AIA), two life insurance holding company subsidiaries of AIG. AIG will retain control of ALICO and AIA, though the New York Fed will have certain governance rights to protect its interests. The valuation for the New York Fed’s preferred stock interests, which may be up to approximately $26 billion, will be a percentage of the fair market value of ALICO and AIA based on valuations acceptable to the New York Fed.
Tuesday, March 3, 2009
Wrong again - on AIG
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John, do you think International Lease Finance (ILFC) is valuable?
I always thought it was - but less valuable than it looked because its value depended heavily on the AAA rating. Things which make money only because of that sort of rating are worth less than they look.
That said - the main competitor - GE - is also impaired. So maybe it will just make money straight.
Summary: too hard to know.
Who is the US really bailing out here?
I mean, who are AIG and Citi debt holders? Are they foreign? Are they mainly some powerful gang or is the debt widely distributed? Does anybody have a list?
If I were a US taxpayer I would like to know who am I really saving.
The counterparty risk I get, nobody wants counterparties to get hurt, but the debt holders must begin to face the outcome of their investments.
I accidentally deleted two comments and can't get them back. To the people who posted them I am sorry.
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