AIG Raises Funds to Repay Bailout Money

By Robert Davis
Nov 1 2010

AIG announced this morning that they have raised $37 billion in an effort to repay federal bailout funds and regain control of their company from federal regulators.

AIG is just one of the many large companies that accepted bailout funds to prevent a total failure when the financial crisis hit.

As part of the bailout process, AIG agreed to be regulated by the federal government until such a time when they were considered viable once again. AIG has said that they are ready to remove the regulations and repay the funds that were infused into the company coffers.

During the financial crisis more than $180 billion from the massive $700 billion in bailout funds was funneled to AIG. They became the largest receiver of federal funds during the crisis. From the beginning they said that they would repay the loans in full and regain control.

Once the repayment plan has been completed the Federal Reserve will exchange their controlling share of preferred stocks for common stocks and effectively return control of the company to the executives.

AIG sold a subsidiary insurance carrier and issued a new IPO of a new subsidiary to raise the necessary cash for the repayment. They are the latest in a long line of companies that have started to repay the taxpayers in an effort to get out from underneath the federal regulators.

Early in the financial crisis AIG announced that they were in danger of closing their doors, potentially crippling the financial market. They were deemed too big to fail by the federal government.