NY Will Allow AIG To Borrow $20b From Subsidiaries
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New York’s governor says he will allow American International Group Inc. to use $20 billion in subsidiary assets to provide the cash needed for the troubled insurer to stay in business.
Governor Paterson said today he asked state insurance regulators to essentially allow AIG to provide a bridge loan to itself. Mr. Paterson has also asked the head of New York’s insurance department to talk with federal regulators about more loans. Mr. Paterson says AIG remains financially sound.
AIG has been battered over the past year by billions of dollars of losses tied to deterioration in the mortgage and credit markets.
Shares of AIG fell 51% to $5.93 in afternoon trading. It had been down 63% before Paterson’s comments.
