Changes In Your AIG Investment Structure

Update @ 7:30 PM

New details are emerging on our investment. Here is the link to the WSJ article. There aren’t enough details yet to put everything together but it looks like our IB’s are working hard for us. For instance, they say they’re negotiating hard on the value to assign to the two life insurance companies that we get in return for cancelling some of the debt. I’ve no doubt that we’ll get a good deal.

Just keeping you up to date on your AIG investment.

The AIG board has approved the new deal with us. It includes:

  1. The Libor floor on the interest rate that AIG currently pays us for our credit line will be eliminated. Currently they pay 3% over Libor. I think this means that we now are lending them money at 3%. Don’t know what happens if interest rates start to rise.
  2. We get stakes in their Hong Kong and Japanese life insurance companies. Basically, there swapping these companies for some of the $40 billion in debt they drew on our credit line.
  3. We are going to make some loans to buyers of International Lease Finance Corp, the aircraft leasing company they want to sell. Don’t know if we get to do any due diligence on the loans or if we just agree to finance whatever they come up with. Maybe we get some equity kickers in the deal.
  4. We may also take some life insurance policies in exchange for more debt forgiveness.

We need more details but presumably our investment bankers negotiated at length on our behalf. They know they’re on the hook because of the promise they made about making money off of this deal. So far it’s been less than we expected but this may be the deal that turns it around for all of us.

more: here

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